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Small Businesses Increase Revenue by
Giving Up Control.
By Sharron Senter
Why is it big businesses tend to have multiple sales channels such as
third-party, b-to-b, retail and ecommerce, while small businesses usually have
only one?
I believe it has to do with control. Many small business owners have a difficult
time letting others represent them. True, no one “gets the job done like you.”
However; you can only bill so many hours in a day or sell so many products in a
week, and if increasing revenue is a priority for you, then you’ll need to
extend the availability of your services or products through others. Don’t
misunderstand me. There’s nothing wrong with being a one-person-show. In fact,
many entrepreneurs prefer this lifestyle. However, many others want to earn big
business revenue, which usually comes with some sacrifice of control.
Earn Big Business Revenue By Expanding Your Distribution.
Almost any product or service we sell can be sold through a third-party, someone
other than ourselves.
In exchange, you give the third-party a percentage of your earnings from the
business they bring you, or,
sell them a product at a reduced rate and they make a profit through product
margins. When you approach a company to sell your product or service, there
needs be a win-win relationship. Prepare to discuss the following: Where is the
revenue stream? What is the compatibility of your third-party’s product line
versus yours? How will you help the third-party sell your product? In short,
what’s “in it” for the third-party?
Suppose you’re a graphic artist and you personally make the pitch to close every
sale. Instead, expand your distribution by asking printers, specialty
advertising companies and consultants to sell your services. Meet in advance to
discuss the most common design jobs, the number of hours involved and what the
rates will be. Your third-party now pitches her newly available graphic design
services (which are actually yours), you complete the work, while the
third-party collects the money and cuts you a check for 65% of the profits.
Who should I approach to expand my distribution?
Perhaps you’re the owner of a flower shop. Try approaching bridle boutiques,
wedding planners or caterers and offer a 15% commission each time they sell one
of your custom floral packages. Suppose you’re an accountant. You may think to
yourself, “I provide a highly-specialized service. What third-party could
possibly represent me?” There are partners out there for you! However, first,
you must consider your customer’s perception of potential third-parties. If they
perceive you offer a specialized service, then whomever you decide to partner
with, must also be perceived this way. Therefore, it makes sense for you to
partner with highly-specialized and regarded experts such as business
consultants and attorneys. The most important element the three of you have in
common is that people come to you for expert advice. Therefore, when an attorney
refers someone to you, this person already has a high regard for your services
due to your association with their attorney.
Here’s another example. You’re a professional organizer and your expertise is to
go into your clients’ homes and help them organize their basements, or go
through their clothes and prepare for a large donation, or rearrange their
kitchen to make it more functional. Whatever it is you do, there are many
vendors out there that you complement. How do you turn other vendors into
third-party partners? First, think about whom your clients spend time with and
what other vendors they employ. For example, you could approach home improvement
professionals, such as carpenters and painters. Ask them to distribute your new
business flyer, and you do the same for them. There’s no risk. Of course, you’ll
want to make sure you’re associating with only reputable vendors, since you
won’t generate a lot of reoccurring business by passing around flyers for
unethical businesses.
All of my examples work in reverse too. If you’re one of the vendors, then
consider approaching the flower shop or accountant and initiate your third-party
relationship.
P.S… It’s my experience that what keeps us from growing our businesses is our
lack of confidence in ourselves. As far as I’m concerned, if you own a business,
then you have the expertise necessary to get your job done, and the gusto to
approach others and ask them to sell you. If you didn’t, you wouldn’t have the
chutzpah to have started your business in the first place. Now go, build some
third-party relationships and make more money!
About The Author
Sharron Senter is a Boston-based marketing consultant, speaker, writer and
founder of Senter & Associates, an advertising and marketing firm that helps
small businesses retain and acquire customers. Learn more at
http://www.sharronsenter.com/fs.htm
If you're an editor looking for original marketing content, please email me to discuss your needs. Sharron Senter.
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