Editor’s note: How many times in your life have you heard some version of the words “go get a job” from well-meaning parents, teachers, friends or spouses? But has anyone ever told you to “go start your own company”? Does that seem too scary, too tough or impractical? Yes, it can be hard. And, yes, the prospect can be frightening. But whether it's a beauty salon, a mortgage company or an interior design business, ownership is an important block in building wealth and having something of value to pass on to the next generation.
Small businesses are also a major economic driver, accounting for about half of all the jobs in the private sector. With black unemployment still twice that of whites, one benefit of entrepreneurship is to grow our own jobs. Right now black-owned businesses are far off-pace with the population, accounting for less than 6 percent of all small businesses (pdf).
We asked nationally known small business expert Melinda Emerson to share her expertise with The Root’s readers each week, with advice on how to start a business and strategies for surviving and thriving. Her column is called About the Money With Melinda Emerson. Today Melinda talks about how to find good clients for your new enterprise.
Done incorrectly, prospecting for new clients can feel like the worst experience in your life. However, if you take the time to screen your leads, you will have a more satisfying experience finding business and working with clients you enjoy. We all have had clients whom we want to fire. But using my ACT method, you can weed out prospects who aren’t ready to buy and spend more time on ready clients who will grow your sales.
Like it or not, every business owner is a salesperson, and you have a certain amount of time to qualify new opportunities. The best salespeople have learned to only spend time with companies that are ready to buy and can explain the challenge they’re looking to solve.
One of my coaching clients called me recently asking what to do about a perspective client who keeps setting up appointments and breaking them without notice. People are human, so I think you should allow one screw-up. But rescheduling a meeting or conference call more than once is a big red flag. Years ago, Oprah paraphrased Maya Angelou, saying, “When people show you who they are, listen the first time.” She was talking about dating, but the same rule applies to perspective clients. If the client can’t keep appointments or get back to you, it might mean they are really unorganized or they simply don’t value your time. Either way, walking away early is the best thing. Imagine what they would be like to actually work with on a project. When you decide to move on, be careful not to show any annoyance or hostility. Politely end the relationship by telling them you have a new client you just took on and no longer have availability.
Effectively qualifying opportunity requires you to have your ACT together! ACT is an acronym for the three key steps in the qualification process:
Ask for their budget. The phone screening is the key to avoid wasting time. Before you agree to the first appointment, find out what the budget is for the project. It’s common to hear, “We have no idea; we are just gathering information” or “Can you send me some information?” Respond with, “I would be happy to send you my marketing materials or a link to our website where you can research more. When you are ready to move forward with some idea of a budget, I would be happy to meet with you and any other decision makers.”
Credibility. Now you need to validate their request. Try this: “I have several pieces of information I could send. Can you please tell me a bit about your business issue?" If they say, “Just send me what you have,” you are not dealing with a well-qualified opportunity. If they tell you about their business and the problem you will be solving, you should aggressively move forward.
Test. In the final step, you are going to test the prospect’s intention by establishing next steps. Ask something such as, “Once you have the information, what is your timeline? What are the next steps?” Their response will provide insight into the seriousness of this business opportunity.
It’s a big, mean world out here, and many times people will waste your time by picking you clean for free ideas, pricing or just because they have no clue about your service. Don’t be fooled! Time is money. Qualify your prospects and watch your sales significantly increase!
If you have had any good or bad experiences with perspective clients, I want to hear from you. How did you handle the situation and what advice do you have to share?
Melinda Emerson, known to many as SmallBizLady, is CEO of Quintessence Multimedia. Emerson educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. She also publishes a resource blog and is the best-selling author of Become Your Own Boss in 12 Months. Follow her on Twitter.