How does a small business make a first sale?

I think a quality answer to this question requires a little context setting.  How you make a first sale will vary quite a bit depending on what type of business you are starting.  My answer which follows applies to software/saas startups targeting business customers (b2b product companies).  My answer is mostly relaying my personal experience co-founding KACE Networks which sold to over 10,000 customers and was acquired by Dell in 2010. 

First things first.  Hector Quintanilla's answer is right in that it's really important to make sure your product will sell BEFORE you build it.   How do you do that?  Here are a few things that we did:

  1. Test Market Before You Have Anything to Sell:
    At KACE, back in 2003/4 well before we had any product to sell we actually built a few ad-words campaigns for a yet-to-be-built product concept.  These campaigns included specific ad-words buys and fake landing pages and dedicated budget.  We simply wanted to see whether or not if we purchased ad-words customers would click on those ads and hit our website.  The answer was Yes.  Good Sign!

  2. Survey Actual Prospects in Your Target Market:
    We created a survey to understand exactly what challenges our target customer had in the area of IT management.  The interview guide had detailed questions which required a phone call or customer visit and about an hour of time to work through.  This was a guide for a real conversation with a real potential prospect NOT something you would send out via Survey Monkey or similar.   We had over 30 conversations with prospective customers to better understand what pain they had, 
  3. what solutions they had previously considered, what their buying criteria would be, what features and capabilities would be important, how much they'd be willing to pay, why they hadn't bought another solution in the past and more.  The survey findings guided our market segmentation, go to market strategy and product design.
  4. Target Market:
    I touched on target market above.  It's really important that you determine exactly what type of customer you plan on selling to.  Are they large companies or small companies?  Which industries will care the most?  What is the title of the buyer?  How do they think about spending money for products like yours?  Etc.   If you do your homework (as articulated above but also including other types of research like talking to industry veterans and analysts), you will pick a market segment where the demand will be greatest and your product team will be able to zero in on the key features that will make the most difference for those customers.  Also, you'll be able to engineer your marketing and sales strategy to effectively acquire those customers (e.g., proper price point, proper sales model, proper marketing techniques).
  5. Ok, now you've done your homework and you've built a product and you're ready to sell.  What next?  I recommend a few important approaches which take a ton of persistence and hard work.  There are NO shortcuts that I know of:

  6. Start Early
    Start selling at least 4-6 months before you have a sellable product.  It's as important to engineer the sales process as it is to engineer the product itself.  Selling in advance of product will keep the pipeline of ideas flowing that will make your product better and it will help you tune how you pitch your product, how you price it, how you demo it, how you close customers etc.  Do Not Wait, sell now!

  7. Do NOT Hire a Salesperson
    I understand that you may not have sold anything before.  It does not matter.  If you are going to succeed building a company then as founder/ceo you MUST be the number one sales person initially.  NO ONE will care or work as hard as you and no one will communicate as much passion as you.  And, importantly, if you're successful you're going to have to train 1000s of people after you to do this hard job of selling.  Figure it out for yourself first and you'll have street cred with your investors and future employees.

  8. Block Time and Be Relentless
    When I started selling the first KACE Systems Management Appliances, I would block my calendar from 6am PST to Noon PST every single day.  During those times I would do NOTHING but try to sell.  Unless directly related to selling, No checking email,  no meetings, no surfing the web, no nothing. 90% of the startup entrepreneurs I work with have a hard time with this but brute force works.  Why 6am to Noon?  Two reasons: 1) 6am PST is 9AM EST, so you can start on the east coast.  By 9AM PST (noon EST), the phones are dead in the east, so you can work your way west.  These are prime sales hours when people check their email and are more likely to pick up their phones.  Use this time to outreach to new prospects.  Where to start?  Build a list of every company you can that can that is in your target market.  Start locally but think nationwide too.  Find names via Google and Linkedin.  Network.  Call your friends.  Call your friends friends.  Ask for referrals.  At KACE, the customer was basically anyone in a midsized company who you'd call if your computer stopped working.  I could call anyone in any company ask for their help and simply say, "Who would you call if your computer stopped working?  Can you introduce me to that person?"  Email is important but DO NOT shy away from the phone and in person meetings either. Business gets done for most B2B products (with price tags >$5k) when you talk with people.  If you aren't talking with people, you're not selling.
  9. Target Your Efforts and Time to No
    Do not call any customers who are not in your target market.  If you're targeting SMB, only call SMB propects and so on.  If you accidentally get to a customer who you don't think will ever buy or is not in your sweet spot end the conversation and move on.  Don't let a prospect who is not in your sweet spot hijack your roadmap and waste your time.  Every customer is not a good customer.  I could spend an hour on this point but will save that for another post.

  10. Ask this Question Every Single Time
    Literally, every single time you talk with a prospect (even if you spoken with them before) ask them this question in something very close to this way, "It's been great catching up with you today.  The more we talk the more I see what a great fit our product would be for your needs.  We'd absolutely love to be able to add you to our customer list.  What would it take for you to become a customer of [fill in your company name]?"  This question works.  When you ask it with sincerity and this way you will get prospects to open up and you'll quickly understand if you have a chance in hell to close that customer.  You'll also understand very quickly what you need to do to close the deal.  Here's a sample of typical response to this question, "Gee, I'd have to get this in front of Joe and Suzy?"  Guess what, next step... Immediately ask to set up that meeting on the spot.  Always get to the next step.
  11. I wouldn't waste any time on traditional marketing when you're working on your FIRST few customers, just sell... brute force and persistence pays off.  After you have 3 to 5 or so customers signed up, fire up marketing and begin iterating with that.

    There's a lot more to say about selling a first customer than I've articulated above.  Even as I write this I can think of dozens of more insights, but those are some stream of consciousness thoughts to get you started from the front lines of actually doing it.

Published on: 4/8/19, 9:09 PM