At The Travel Franchise, we make sure you get constant development in how to sell travel effectively as well as market your new business, including mentors and support teams.
But we know that not everyone will end up starting a travel business with us. This article is for anyone that wants to start a business in the future.
Your business runs on sales
It’s what fuel is to a car. Without fuel, the best engine in the world won’t get you anywhere.
And no matter how solid your business plan, how thought-through your forecasts or even how capable your team is; sometimes sales don’t come.
Fortunately, like any other aspect of running a business, selling is a process.
You can make things predictable enough so that it’s not too complicated to fix if things change.
But first you need to get clarity on what’s going wrong.
When sales are going down (or never get off the ground), it can often be boiled down to one of 5 key reasons.
We call them the 5Ps.
1: Wrong Product
We’ve seen this one time and time again: Entrepreneurs invest a lot of money in the development of a product or service, only for it to flop. A few months down the line, no-one’s buying it, because it’s neither useful nor exciting. No-one wants or needs it.
This mistake is simple to avoid in theory but difficult to deal with in reality.
Ideas are easy to get emotionally attached to. You become so invested and so driven by the concept that you don’t deal with things practically.
Some people would suggest doing extensive market research and running focus groups. These are good ideas in principle, but can quickly turn into excuses for procrastination, whilst the results they provide can be limited in their significance.
As legendary advertising genius David Ogily said:
“People don’t think what they feel, don’t say what they think and don’t do what they say”
David Ogilvy
Of course, it’s impossible to predict the future. No-one ever knew they needed an iPhone, let alone an iPad. But, by investing the time to do your homework in the very early days of your business, you’ll save yourself a lot of time, money and heartache later down the line.
Here are some quick tips to avoid wasting effort on the wrong product.
Money Talks
No matter who tells you they love the idea, the only people that count are the ones prepared to open their wallets and pay for it. If you’ve got an idea for a product, start collecting pre-orders as soon as possible. All you need is a 1-page website and a PayPal account.
Don’t reinvent the wheel
If you want to start a service based business, simply look at who is already being successful at it. While you should never copy someone wholesale, adopting the same principles as people already in your niche means you’re more likely to succeed.
As Tony Robbins says “Success leaves clues”.
Buy into a working model
If you really want a fast start, consider buying into a proven model like a franchise. Just ensure that they’ll be there to support and train you so that you know how to make the best of the opportunity.
Bonus: Read our article How to stop waiting for the perfect time to start a business for more tips.
2: Wrong Price
You can be too expensive
One danger of any new company, especially with a brand-new product or service, is that you price way too high. You did your homework and spent time building a comprehensive cash flow forecast. The sales numbers you predicted could make you a millionaire within 12 months.
Unfortunately, the product or service you were planning to sell at £999 isn’t perceived to be worth the same amount by your audience. Assuming you’re good at the other Ps of this list (including your ability to sell on value rather than price – see final point), you might still look too expensive.
The solution is fairly simple:
When you build your business plan, don’t create your price list based on how quickly you can make yourself rich, or what you think it’s worth. The proof comes in market testing to find the right combination of product, price and audience. Sell for the largest possible margin, but don’t forecast against the best-case scenario.
You can be too cheap
Now this might sound counter-intuitive. But being seen as too cheap is just as bad a mistake as being too expensive. Being too cheap brings different issues such as:
- You’ll attract the wrong kind of customers. The ones who will drain your time, pay less and still find a way to question every penny they spend because they’re always after a deal. And, if they happen to recommend you, they’ll do it to like-minded people because of how cheap you are.
- You’ll put the right kind of customers off. Why? Because you send a message to the world that your product or service is so cheap that the quality is likely to be very low.
- You’ll end up in survival mode. Every product or service you sell will bring you just enough revenue to cover your bills, but not enough to grow your business. Money might not be your first priority as a business owner, but no-one wants to be struggling either.
The solution:
You shouldn’t price your product/service too high for the market. That doesn’t mean undervaluing yourself. You must get compensated for the value you bring.
If selling your product at £499 means that all your costs are covered, you still make a good margin and you attract the right kind of customers, don’t settle for £399.
3: Wrong Place
If you have a physical business, location is critical. It’s no good having a fine-dining restaurant if you’ll mostly attract foot-traffic that wants a fast, cheap option.
Similarly, you can waste a ton of money marketing to the wrong audience who’ll never buy from you.
For physical businesses, it’s incredibly important to get the location right as a priority. It’ll be expensive and exhausting to move locations and start again. When marketing your product, make sure you run small tests first. That’ll help you determine where you need to actually invest your budget.
A less obvious, yet common mistake, is when you have run your business successfully in an area and assume you will find the same success in other areas.
Whatever worked for you in the UK won’t necessarily get you the same results in the USA. The solution is to get back to basics. Treat any expansion of your business as if it were a new one, with a proper business plan and go-to-market strategy.
4: Wrong Period
Sometimes you have the right team, with the right skills trying to sell the right product … but the timing is wrong.
There are 2 obvious ways the timing can be wrong:
- The world around you changes quickly and impacts you and your industry.
- Your product/service gets overtaken by competitors or becomes obsolete.
If things change around you quickly
If you suffer a spontaneous change of context, you have the choice between either pivoting (i.e. changing the core activity of your business) very fast, or waiting until everything goes back to normal.
For instance, right now the coronavirus outbreak is detrimental to the travel industry with customers unable to travel. However, the anecdotal evidence is that the vast majority of people are going to be desperate to catch-up on their long overdue holidays when things settle down.
If you’re becoming obsolete
This is a huge problem and risk for every business.
Businesses that don’t regularly update their systems, processes and offering are at the risk of being left behind. This is not necessarily about “reinventing yourself” but making sure your product or service is upgraded often enough to remain relevant.
Not only that, it is important to keep your sales & marketing processes up-to-date and relevant to the ever-changing buying methods that your customers adopt. The way you sold to your customers 3 years ago may not still be relevant today, let alone tomorrow.
5: Wrong People
Sometimes, you have all the bases covered but the sales still don’t come in. This is where you have to look at the people selling. Do they have all the right tools and processes? Have they been given sufficient sales training?
Are their skills regularly reviewed and developed? Do they have the capability of selling value rather than price? Can they carry and convey the company ethos to the right standard? Are they doing enough sales activities on a daily basis?
This applies to you as the entrepreneur too – especially in the early days.
It doesn’t make you a bad business owner if you put someone else in charge of your sales; on the contrary, it makes you a great business leader to recognise that you’d be better focusing and adding value on other aspects of your business whilst delegating the bits you’re not so good at.
But, if you don’t have the resources and have to sell by yourself, then you need to get out there selling quickly.
Sales can be tough and emotionally taxing, so here are 3 tips that can help you.
1: Get a mentor
Try to find someone in your field who’s already succeeded in building a sales-driven business. You’ll be amazed at the generosity of people happy to help the next generation of business-owners. They’ll stop you making mistakes that don’t need to be made.
2: Learn just enough to get going
Sales training is vital – with a caveat. No amount of training is going to beat real-world experience and learning from mistakes if you are short on time. It comes down to a basic set of skills that should be applied constantly.
A book like “49 Timeless Selling Principles and How to Apply Them” by David Sandler is a good place to start.
3: Do the basics, everyday
Here’s the simple truth. If you want your business to grow, you need to be in-front of new prospects every single day.
If you have a mass-market product that you sell online, through distributors or retailers, you need to focus on marketing not sales. You simply won’t be able to speak to enough people 1-on-1 to make it work.
But when you have a niche product or provide a service, personal outreach and selling should be your priority.
There are plenty of ways you can be looking for new prospects. The key is to carve out time every day to do it consistently. This is a list of thing you can get done in a small amount of time:
- Keeping your current contact list updated on what you’re doing (both directly and through useful updates online)
- Asking for referrals & recommendations
- Cold calls & emails to a targeted list of people
- LinkedIn messages
- Joining specialist Facebook & LinkedIn groups
- Be helpful in dedicated communities online
- Go to regular in person networking meetings
- Attending relevant industry events
