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How to Sell Small Business Owners – Retail Part #1
In this free online training course, I will teach you how to sell small business owners. We start with retail businesses and then move on to restaurants.
Today I’m sharing with you my secret to success when in the field: I understand business and love talking to clients about their business. Your local business clients and prospects want YOU more than anything else. They desire a business expert who understands their unique needs. Make your conversation valuable, and don’t waste their time talking about things that don’t matter to their business. You need to become a local business expert in order to sell small business owners. The biggest hurdle in making the necessary transition from selling just merchant services to selling more complex solutions is lack of expertise about local business. In order to help the local business owner succeed, you must understand one core mentality. The local business owner does not have expenses; the small business owner only has investments. Every expenditure is an investment. The business owner is looking for return on investment. In this post, we will discuss retail business and some types of investments the small retail business owner is making.
- One time investments such as shelving or computer equipment. Needs to be durable, long lasting.
- Fixed costs such as utilities, business rent, etc. These costs will be the same regardless of the amount of business revenue. Think in terms of the cost per hour to run the business. Find the total fixed cost expenditures and divide by the total hours of business operation for a month or year. This is the magic number of how much it costs them to run their business every hour.
- Variable costs:
1) Cost of goods sold. Example: The retail business is selling books. The book may sell for $10; they paid $5 to purchase the book themselves. Therefore, they have a gross margin of $5 for that book. The cost per hour to operate the business, as figured above, may be $30. Therefore, if only this one book is sold that hour, the business has lost $25 for the hour.
2) Payroll is another example of a variable cost in some cases. The business owner will try to predict how much business they will do on a day and then plan payroll accordingly. If they get really busy, they need to have more people on payroll during that time. In the next post l discuss ways they may be able to minimize these investments, thus making more money in their business. I will also point out possibilities for you to help them maximize return on their investments.
Have a great day!
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