The best companies never rely on the boss to do the selling.
Who does most of the selling in your business?
Many business owners would reply, “I do.”
There is a good chance that when you’re personally involved in the company’s sales, your business sells more and is more profitable than months where you leave the selling to others.
This makes perfect sense. After all, you’re probably the most passionate advocate for your product or service. You probably also have the most experience, industry knowledge, and the biggest network of connections.
Ask yourself how you’d describe your personal relationship with your company’s customers.
- Do you know each customer by their first name? Do they expect that you get personally involved in the sale when they buy from your company?
- Do you you know some of your customers by first name, and a few of them prefer dealing with you rather than other salespeople or employees?
- Do you know few customers personally? Or maybe you don’t know any of them. Are you almost never involved with serving an individual client?
When we’re working with clients, one of the categories we evaluate is the involvement of the owner in generating new sales. When we analyze all the data available to us, we find that owners who do not know their customers and rarely get involved in serving the individual customer tend to get offers worth 20% more than average.
On the other hand, companies where the owner knows each of his customers by first name and deals directly with them for sales get discounted by about 20%.
To get an intuition about why this is, imagine the situation from the buyer’s perspective. If you buy a company, the owner might stay on for a couple of years, and then they’re gone. Would you want to lose most of your sales when the owner leaves? Probably not. A buyer wants evidence of an effective sales process that persists regardless of the owner’s lack of involvement.
Since this easily adds up to millions of dollars in selling a company, it’s something worth paying attention to.
This is one of the most important aspects of reducing owner dependency. No one wants to buy a company that will implode as soon as the original owner leaves.