The Four Phases Of A Distributorship

Starting a promotional products distributorship is a huge rush—the creative products, the endless number of customer opportunities, the substantial earnings opportunity and the fun of building a rewarding business. In my more than 10 years as an entrepreneur, I’ve had my share of ups and downs. Some of what I’ve learned I share here to help guide you toward building a more sustainable, long-term business.

Introductory Phase

1. Build To Last
The key to the introductory phase is more about what you don’t do versus what you do. For the first 12 months, you are in full learning mode. Dive in and close as much business as humanly possible knowing that these will likely only be your clients for a short period of time because, ultimately, they are net-net. This type of business will quickly leave you frustrated and chasing your tail. Rule: Don’t do favors, even for your mother.

2. Build To Scale
Creating scale is a function of growing your business at an increasing rate over time. Without investment resources to either increase productivity or expand the customer base, scale becomes an ongoing challenge. You have two options:

Option 1—Position your business as a “Product Expert.”
As a product expert, your overall value proposition will continue to be commoditized as buyers move more online.

Option 2—Position your business as a “Marketing Expert.” Rather than being “most creative” or having great customer service, becoming a marketing expert is a valuable asset you can bring to the table; one the competition cannot compete against. Rule: Your vision, plan and strategy will determine your success.

3. Build To Profit
Building a profitable and rewarding business is a function of being passionate, knowing where you make the most money and knowing where and how to best leverage your skills and talents. Rule: Know your Hedgehog (identify what drives your passion, what drives your economic engine and where you can be No. 1.)

4. Build For Success
Like a child who is easily distracted by different shiny objects, many business owners run their business by reacting to their clients. Their efforts end up being highly diluted because they are managing multiple areas that are unprofitable or could be better serviced through outsourcing. Rule: Don’t go chasing the shiny objects.

Growth Phase

The biggest challenge companies face in the Growth Phase of the business model is dealing with the constant range of issues that require more time and money. During this phase, get your running shoes on because it’s fast paced; you will learn a lot by trial and error, there will be many distractions; and your ability to execute (and stay focused) will define your level of long-term success.

1. Build To Last
So, you have a base of customers, which is a good thing. But in my opinion, this is also the easy part. The hard part is having the right customers. The 80/20 rule is nothing new to business; 80 percent of your business should come from 20 percent of your customers. ,i>Rule: Know your 80/20 rule (and stick to it).

Step 1— Define how many customers you want to service

Step 2 — Define the annual spend from each customer

Step 3 — Define the time and execution strategy to capture the spend

2. Build To Scale
To turn a 100-unit order to a 1,000-unit order, or better yet, a 10,000-unit order, you must have two assets in your arsenal:
1. The right type of customers (where purchasing power exists)
2. The right type of technology (where you can move beyond sweat equity)

We live in a technologically advanced world; take advantage of service providers and partners either in the industry or outside the industry to assist your business. Rule: Add another zero to each order.

3. Build To Profit
For starters, you have to know in grave detail how you make money on an hourly basis. Once you have this number, this should impact your decision-making process to increase the profitability of your business. I see more professionals dilute their time by not focusing on tasks that deliver the highest profit for their business. Rule: Pay yourself like a doctor, not a construction worker.

4. Build For Success
To establish long-term success in the promotional products industry, you have to build a business (with customers) that provides repeatable, predictable levels of spend allowing you to grow with a base from prior-year sales.

Here are four strategies to build a predictable, repeatable business:
1. Expand your offering to the executive level
2. Focus on business process vs. promotional products
3. Have a technology platform to “get sticky” with your customer
4. Report your ROI on a regular basis

Maturity Phase

The keys for surviving and thriving in the Mature phase revolve around extending your product lifecycle by adding more products and services that meet the needs of your customers. You do this by throwing out the old playbook and embracing the new.

1. Build To Last
Surviving the Mature phase requires company innovation at the customer level. You must add significant value to the end customer or you will lose to the competition. With more and more customer options (direct players) and younger buyers (20-somethings) entering the game, you have to adapt by leveraging technology to speak to these new consumers. Rule: Continue to innovate or risk extinction.

2. Build To Scale
Social marketing, social commerce and social networking are all new terms within the last five to 10 years. These innovations are completely revolutionizing the way business is done. Mature companies that face the highest risk of extinction tend to have a lack of resources or unwillingness to change. Rule: Redefine your customer offering.

3. Build To Profit
A top priority for any business is to drive a healthy profit. During the Mature phase, the profitability of the business will continue to be challenged as companies lower their selling margins as a defense strategy to maintain market share. There are opportunities for innovative companies to streamline poor processes and/or partner with companies to outsource processes that other entities can do more efficiently. Rule: Maximize business leverage across the entire supply chain.

4. Build For Success
At the Mature phase of a business model, it is even more important to get out and listen to what your customers and suppliers are saying about you, your industry and the competition. Have a goal to identify the market leaders, the new trends in the industry and the changes of the buying practices. Rule: The best ideas could be outside of your office.

Decline Phase

The Decline phase of the business happens when management becomes complacent and fails to adapt to changes in the industry. Getting your business back in shape takes a good amount of effort, but more importantly, it takes a good amount of strategy.

1. Build To Last
By this stage in the promotional products game, you should have a clear understanding of what services earn you the most profit and which ones are actually costing you money. Rule: Rid yourself of all unprofitable business behavior.

2. Build To Scale
Almost every successful company has built its empire based on a flagship product or service—that one differentiator that launches the business and helps maintain brand loyalty throughout the life of the business. Having this kind of value allows you to stay in the mature phase longer, avoiding decline. Rule: Find your niche (and don’t go off the game board).

3. Build To Profit
In the Decline phase, it’s time to get tough and this means making tough decisions. Consider reducing costs by reducing marketing support and the number of services you offer while continuing to promote your existing, more proven services. Rule: Eliminate all services that don’t provide immediate revenue.

4. Build For Success
One strategy that could be implemented in the Decline stage is to increase the price of your best- selling service, but only if there is little to no competition. Your best bet is to find new uses and ways to reposition your service and reinvent your business. Rule: Add some new features, products and services to extend your value.

As you evaluate your business, take each of these four phases into consideration. How will you adapt to your environment and strategically gear up for the future? Listen to your customers and find ways to engage with them for the long term. If you do, you will be highly rewarded.

3 Tips to Grow by 300% in 24 Months

In life and in business there are several factors that separate those that win vs. “get by” vs. lose. In the promotional products industry, you can boil the list of reasons into a single word with three different scenarios.

The vast majority of people selling in the promotional products industry are not selling to their full potential. This article is meant not to criticize, but to inspire sales professionals to be authentic and inspect the strategic foundation to take their business to the next level. In a perfect world, a sales professional would be selling big orders on a high margin with great customers that are extremely loyal. This book of business would grow annually by 30-50% (regardless of the economy).

This is a great goal but for most it is completely unrealistic. In my opinion, very few professionals in the promotional products industry ever achieve this high-level of sales nirvana. The reason is simple; they have very little to no leverage within their business and take a reactive approach to managing their business.

Let’s look at 3 different points that all sales professionals should incorporate into their business:

1. Customer Leverage – If you are servicing a high diversity of clients with a broad subset of needs – you may still be writing business, but you’re creating very little leverage across your customers. To gain customer leverage, you must find an industry vertical where you can be the top in that space and be considered an expert in the field driving repeatable business that maximizes your domain expertise.

2. Selling Leverage – My skin crawls when I hear of a professional doing collections or calling on suppliers to check order status. As a sales professional you make the most money in front of customers, selling your products and services. Anytime spent on back office or administrative duties is negatively impacting your earnings. A simple formula to measure your selling leverage is identifying what your earnings/hour. Then go a step deeper and what you make per hour when you are selling. Start outsourcing everything lower than you get paid per hour.

“If you spend your time, worth $20-$25 per hour, doing something that someone else will do for $10 per hour, it’s simply a poor use of resources.” – Tim Ferriss, Author of The Four Hour Work Week.

3. Technology Leverage – In today’s economy the majority of professionals do not have any technology leverage.  By technology leverage, I am specifically speaking about technology that gives you the ability service 3X the number of buyers, market to 10X the number of prospects and build a business that is more sustainable with the technology-savvy buyer demographics. My fear for most industry professionals, they position themselves to lose relevancy if they don’t incorporate technology leverage into their business. (Need proof – see the travel agent industry).

“In this new wave of technology, you can’t do it all yourself, you have to form alliances.” – Carlos Slim Helu, Wealthiest man in the world in – 2010

So my formula to grow by 300% over the next 24 months:

A professional should be seeking leverage in three areas of their business. Only embracing 1 or 2 will leave money on the table.

Happy selling… let me know your thoughts on other solutions you have found to create leverage within your business.

Cheers!

How will you communicate in 2014?

Someone in our management meeting last week said that “email is for old folks.” We all laughed, but then I realized the comment rang true on some level. Out of curiosity, I looked into my own communication habits, and I discovered that about 30% of my direct messages come from LinkedIn, Facebook or Twitter.

No one can deny that the way we communicate is changing. Also changing is the type of device we use to talk to and share things with each other. Increasingly, the way we communicate is determined by the type of screen we use most (and vice versa). For instance, smartphones and social media just work together.

Fast forward to 2014: where will information come from? How will selling products and servicing customers change? What screen will you reach for to communicate with clients, and what form will that communication take?

This video puts into perspective how quickly screen technology is developing and gives a glimpse into what it might look like in 2014.

What are your thoughts on this video? Do you see yourself waking up and reading the news on your mirror? If you don’t, your kids definitely will.

Be Boundless,

-JB

Exponential times

I ran across this video a while back, and I recently came back to it and was amazed by its message all over again. If you haven’t seen it, I highly recommend checking it out. The video highlights some astounding statistics about the “exponential times” we live in, and I feel like this information is more relevant now than ever, especially to those of us in the promotional products industry (which is changing so fast it could give you whiplash).

The reason I keep going on about change is because I genuinely care about people in our industry being successful. Many of you are seeing a change in customer behaviors. Are you positioned to take advantage of the shift? If you’re not sure, or if you want to talk strategy, please give me a call. I love talking about our industry, and (obviously) I love talking change.

-JB

Change your bait

In Texas we have a saying that goes, “if you’re not catching fish, you need to change your bait.” Now more than ever, this statement can be applied to the promotional products industry.

In the spirit of fishing and bait, I wanted to share with you a “big fish story” about how one industry professional changed her bait to win a trophy account. Click below to read her story:

As a professional, you have powerful relationships and customer expertise. The question is, if you changed your “bait” and leveraged the Boundless platform, could you catch more fish?

Let’s go fishing!

-JB

The next generation

Throughout history, there have been only a few times when entire generations follow a different path than their predecessors in business.  In most cases the apple doesn’t fall too far from the tree–many approaches to business and sales strategies remained consistent over long periods of time.

Right now is one of those rare moments. The world is changing, as I’m sure you know. Moore’s law says that technology performance doubles every 18 months; this evolution is shifting business strategies to the extent that the younger generation does business very differently than older generations.

Whether you are buying a new car, buying promotional products or communicating with your friends, you’re doing it differently now than you did 20 years ago.
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Fun with whiteboards

We recently finished work on one of my favorite projects we’ve done in a while: building a new website that specifically showcases the Boundless difference for industry professionals. We created the video below as part of this project–it was fun to film because I love whiteboards (and have awesome drawing skills, as you can see in the video). Put a dry-erase marker in my hand and I’m in my happy place.

Take a look:

Click here to check out the others.

Let me know if you think I:

1. am right
2. am wrong
3. need medication

Look forward to hearing your thoughts.

-JB

Takeaways from Vegas

I love Vegas, and I’m not ashamed to admit it. It’s perfect for my personality. This year’s trip to Vegas for the PPAI show was another great experience: I worked hard, played hard and completed my own “Vegas trifecta.” Although I did end up paying for several months’ worth of “free drinks,” I was able to fit more than 25 productive meetings into just five days. I’d call that coming out on top.

That being said, I have a few takeaways (and advice) for my fellow industry professionals.
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Vegas and change

“It is not the strongest of the species that survives, nor the most intelligent. It is the one that is the most adaptable to change.”

Vegas is less than a week away. My question to you: are you going to approach this trade show the same as you have the last five years, or are you going to have different goals to better prepare you for the changes that will be impacting your business/earnings? It is my opinion that the people who will thrive the most in subsequent years will adapt to change the most in 2011, and PPAI Vegas is a great place to start.

Three things you should do in Vegas
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Three things to do over the holidays for a successful 2011

Last week I shared my predictions for things that are likely to happen in 2011. This week I want to switch to professor mode and give you some holiday homework—do these three things before 2011 to turn “ho-ho-ho” into “dough-dough-dough.”

Create a business plan. I’ll say it bluntly: if you’re not doing a business plan… you’re a monkey. Creating a business plan is one of the most important fundamentals for success, yet I would bet that the majority of people (business owners and sales professionals) don’t take the time to do it. Don’t tell me you don’t have time or you don’t know how. A quick Google search will land you hundreds of guides and templates that you can work from. I beg you. This is absolutely essential.
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