What Kind Of Business Are You In?

Monday, 9.09pm

Sheffield, U.K.

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Every great cause begins as a movement, becomes a business, and eventually degenerates into a racket. – Eric Hoffer

Zig Ziglar, the motivational speaker, used to tell a story of a friend of his who was struggling to make it as a salesperson.

His friend sold cookware – pots and pans – but was finding it hard to convince his prospects to buy them. He would call on people, take them through the sales pitch but then, when it was time to ask for the order, be unable to close.

So Zig asked him a question.

The question was – “Do you own a set of these pans?”.

The friend said he didn’t. They were too expensive. He couldn’t afford them.

Well, said Zig. How can you expect someone else to buy these goods if you aren’t willing to reach into your pocket and pay for them yourself?

The remedy, said Zig, was for his friend to save up and buy the pans. Or borrow the money and buy them now and use his sales commissions to pay them off.

Once he had made the decision to invest in that cookware himself, with his own money, he would be able to stand in front of prospects and sell with honesty and authority.

Perhaps not necessarily authenticity – but that really depends on how you look at things.

The Eric Hofer quote that starts this post is apparently a misquote, but it’s a good misquote that’s worth exploring a little.

What kind of product is the easiest to sell?

Perhaps the way to turn this round is to ask yourself what kind of product is the easiest to buy?

For me the answer is simple. Books. I would happily browse and buy books all day long. I can’t – because I have too many already and don’t have the space. But still, if I were to break and order something, it would be a book.

It wouldn’t be Lego.

For the little people that I keep tripping over, however, Lego would be top of the list. Along with most other toys in the shop.

For others, it’s clothes, or shoes or technology.

So the easiest kind of product to sell to you is the kind of product you want to buy.

That’s why a lot of advice to founders is to ignore what the market wants and make something you would use. Eric Steven Raymond writes, for example, that every good work of software starts by scratching a developer’s personal itch.

In other words, do things that have a purpose. Something that could turn out to be the start of a movement.

Now, in an ideal world, you’ll work on something you really care about, something that you’re excited about waking up in the morning and working on. You’ll pitch your idea to everyone, not selling, but just being enthusiastic and passionate about what you’re doing.

It’s a little harder to do that about cookware.

Or is it? If you cook, the chances are that you lust after Le Creuset and Global.

Zig’s advice is still sound, really. You can either think in a certain way and act accordingly. Or you can act in a certain way and end up thinking accordingly.

The first is business with purpose. The second is just business.

You’ll probably end up selling your product to someone as a result.

Then, it’s time to think about what kind of business you’re in.

A good business is where what you pay is price and what you get is value and there is a fair exchange going on.

Both sides are better off as a result of business. Profit is a good thing here – it helps you invest in your business, pay staff and create happy customers.

You’re on the side of the angels here.

But then there is always the call of the dark side. When good things turn bad.

Take financial services, for example.

Financial advice is an oxymoron. Ben Graham, the father of value investing, talks about how odd it is that people work hard all day for money, toil at building businesses to create money they can invest – and then hand over that money to someone else.

You know how hard it is to earn money. Do you really think that an advisor is now going to help you make more money?

Well, they’re not. The first thing they’re going to do is take as much out of your pot for themselves as possible. Every penny you save on their commissions is money that goes into your fund, to compound and grow for you.

Of course there are good funds and good advisers. But you would be wise to learn how to invest for yourself. As Warren Buffet writes, there are often two kinds of families. The Gotrocks and the Hadrocks. Guess which ones took advice from someone else?

Hofer’s point about a racket seems pessimistic, cynical but also depressingly true. We live in a world of too-big-to-fail banks, protected industries and systemic monopolies.

Perhaps someone with a purpose will come and tear it all down one day.

For a salesperson, however, what’s important is this.

If you are selling something you use yourself, something you would pay for happily, something that if you couldn’t buy, you’d try and make yourself – then you have a product that you can believe in.

If you have a product that people need, that can be sold at a profit, then you have a business.

If you’re in a racket – well… you’ll probably get very rich. And happy. Maybe.

Cheers,

Karthik Suresh

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