Author: MIchael and Bonnie Harvey

We talk about the Barefoot Startup very often. But, what is it exactly? It’s sales! That’s it! Selling before your doors open; sales-supported growth; sales maps for new hires; overhead warranted by sales; bonuses based on sales; and development built on the cost of sales. The Barefoot Startup philosophy is sales-driven.

Why this fixation on sales? It’s how each employee gets paid. Each and every one! If not for the sales department, everyone else—production, marketing, HR, admin, and CEOs—wouldn’t serve a purpose.

Why is the Barefoot Startup so vital today? Focus on sales has vanished. Instead, we favor programming, engineering, HR, production, and legal.  We’ve grown to think that breakthrough technology, an amazing app, or a new financial system takes priority over sales. They don’t, and they never will.

In the Barefoot Startup, product design is determined by sales. You aren’t finished until you thoroughly understand how the market will be accessed and what the market wants.

Today, people believe success is based on financing. It’s not! You can secure financing before making a single sale. You can quickly burn out your investor dollars, too, without sales.

Startups trick themselves into believing that landing a spot in a major retail store is a recipe for success in itself. It’s not! This is not the end—it’s only the beginning. Real success is increasing and maintaining sales while staying in the market.

We’ve seen companies that have pushed marketing while neglecting the importance of sales. They’ll take a bow when sales are up, and they’ll blame the salespeople when numbers are down.

With no sales plan, no sales experience, and a really cool idea, you can still get financing. This way of thinking isn’t limited to just startups. Their investors can take sales for granted as well, and they shouldn’t. The failure rate of startups is on the rise. Over half of small startups collapse within their first four years, according to Small Business Trends.

No matter how bright, no idea is going to sell itself. Every idea must sell and, more importantly, resell on a continuous basis.

Focus should be on the cost of sales. Instead, it is usually on the cost of goods. But, if you aren’t able to service what you sell, you’ll soon be off the market. If your sales can’t generate positive cash flow, you’re stuck pleading with investors just to keep the lights on.

Today, business owners think if they have a cool idea and catchy marketing, all it takes is some people to sell it. If they don’t make sales, just get rid of them and hire more. Right? Absolutely wrong. With this revolving door, you never learn why your idea didn’t work—until it’s too late.

How did this happen? The world of sales has gotten a bad name. Nobody wants to come across as “salesy.” People don’t want to face rejection. And the “typical” salesperson is viewed as a shady character who is only after your money with almost nothing to offer in return. A good salesperson offers first-rate customer service, and they should be a startup’s top priority, not the bottom.

From small startups to large corporations, the time is right to implement the Barefoot Startup. Get started now! Focus on the most important key to success—sales!

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We see it all the time—entrepreneurs become fantasized with their products, and they believe that their ideas alone will make them a riveting success. Tons of great products waste away in warehouses, never seeing store shelves. Founders of start-ups resort to working for their investors, or even worse, closing their doors for good. Their dreams have crumbled, and they’re back living with mom and dad. They’ll ask themselves: Why? Because they didn’t master the three fundamental abilities of a successful business.

1. Distribution Management: Before your product gets to your customer, you have to get it to market! This is commonly overlooked, but it is perhaps the most important skill a new product creator can have. They are blinded by their product—they think that if it is good and priced right, it will sell. But people want to know why they should carry your product—not why you are selling it. Sales managers want to know how your product will boost their sales numbers, and salespeople want to know what the incentive is. Why should it be stocked on the shelves? And how fast will it turn? Your customer cares about price and quality. Sales managers, salespeople, store retailers, and clerks do not. But, if you don’t meet their needs, your product won’t make it to market. Your product is not nearly as important as its distribution—it can’t sell if it’s not there!
2. Cash Flow Management: You have to pay your bills! And if you can’t, there are two options: Raise money, or close your doors. But, how do you expect to pay your staff without sales? Many companies attempt to get financing to take care of that, but they may be financed and even refinanced before they can make up the overhead. In this case, they rely on continuous new investment to keep above water. There are a couple of solutions. First, you could make sales your top priority, and sell as best you can in a small territory. Then, use those proceeds to finance growth. Or, you could form tactical relationships with your buyers and vendors. If a vendor trusts you, they’ll help you make ends meet by extending your credit. A buyer who trusts you will pay in cash in order to get discounts, which helps you pay the bills.
3. Personnel Management: Getting help isn’t easy, but you need it! One of the most valued skills of a successful entrepreneur is hiring the right people. But even when you find the perfect employee, you still have to incentivize, inspire, and properly train them to want to do their best. It’s a lot to ask for, but it is essential to your success. Even creating a compensation system that works can take years of failed attempts. Start with the basics—we suggest you create a bonus structure to ensure sales, development, and profitability. Make sure everyone agrees on the specifics, and make sure they understand how their jobs will contribute. Give a quarterly bonus to each employee, no matter their duties, so everyone feels like they’re on the same team. This builds a foundation for positive company culture.

These 3 fundamental abilities could differ from company to company, but they typically follow the same pattern. Master these proficiencies, and your great ideas will have a better chance at success!

For more, read on: http://csnetworkadvis.staging.wpengine.com/advisor/michael-houlihan-and-bonnie-harvey/