3 Important Ways Being Different Works to Your Competitive Advantage

"None can duplicate my brush strokes, none can duplicate my chisel marks, none can duplicate my handwriting... Henceforth, I will capitalize on this difference for it is an asset to be promoted to the fullest."

In Og Mandino's classic "The Greatest Salesman in the World," one of the ten scrolls (Scroll IV) devotes its theme to capitalizing on the unique angle that only you can bring to your professional field.

Far from just a pat on the back about being unique, it points to a universal truth about how capitalizing on your differences in the marketplace, rather than your similarities, will not only give you the competitive advantage but by its very nature bring out your best.

In the same spirit as the great Og Mandino, here are 3 reasons to use being different to your competitive advantage, rather than to spend your energy trying to better fit in.

1) Price is the last differential of the similar. The different can stand alone, and can base their price on value.

If you compete by being similar, your only differential will almost always end up being price. If you want to go that road, know that you will only win if your product or service is the lowest price, and this devalues not only your now smothered uniqueness, but your bottom line. If you are different, and in an authentic, meaningful way, you will be able to base your price off of the unique value you give, and since this difference is unique to you, it will be much harder to copy or undercut for your competitors.

2) If you're not providing a unique product or service, or a unique angle on a product or service, than it's likely you're not solving anyone's problems.

In order to have a competitive advantage implies there's a market in the first place. If that market is not already being served than you are unique by definition, but if there are already others serving that market, and providing for and solving those customer's needs and problems, than you must find out how you personally can do it differently, and of course better. Otherwise there's no reason for your presence there, unless you want to compete on price like the first example.

3) The leader is always different, first. If you are truly different you are always in first place in your niche.

Sure it is helpful at times to see what else is going on in your field, but only to see how it can help enrich your own vision, not to abandon your differences and follow someone else's path. The leader in any field is the one with the competitive advantage. Being similar and first are incompatible. Others may copy you, but that is a good problem to have, because if it's an authentic difference you will remain an original in spite of others flattering attempts to imitate you.

How to be a Super Connector

Building lasting relationships and connecting with people can be a valuable skill for any person in any business, industry, profession or position. It is one of the most common traits that successful people point to when asked about what helped them in their journey. Chris Fralic, widely known for selling his software to Oracle, being responsible for the first rounds of investments for Warby Parker, Roblox, Hotel tonight, and helping launch TED talks, considers staying super connected the biggest contribution to his successful career.  According to Fralic, going above and beyond with connections can really improve the quality of your career and life in the long run. His main advice is to add value to conversations by showing genuine appreciation and interest and truly engaging in your conversations. Here are the main takeaways from his comprehensive advice on how to do it right. 

 

Conveying genuine appreciation

Something that leaves a good imprint on anyone is if they listened to and appreciated what you had to say. Fralic suggests you offer short responses like “of course”, “that’s awesome”, “really” and ask follow-up questions in all your conversations. Back-channeling helps let the speaker know you are following what they are saying and value their input. A lot of the times people hear a person speaking but don’t really listen, and listening with intent not only adds value to the conversation on your part but allows the speaker to contribute more meaningfully to the conversation. 

 

Blue sky brain storming

Sometimes it just so happens that you have barely anything valuable or appreciable to respond with when a person approaches you with either an idea or plan or such. In those cases, Fralic says it is good to offer another way of looking the situation. Brainstorming with related ideas and newer perspectives with your acquaintances gives them something special and unexpected even if you could not provide what they were looking for. Fralic has been in those situations where an investment does not work out, but has been left impressed by the founders responding to it with optimism. 

 

Don’t fake it till you make it

Although a widely encouraged method of getting through intimidating conversations, Fralic says “fake it till you make it” does not work. Even if it superficially gets you through an interaction, bluffing your way through can lead to bad decisions. Especially during important meetings and interactions, it can make you lose more points than faking it can earn you. A much more genuine and organic way to be confident around, say senior management, is to sincerely find out their career milestones, why you care about this person and company, news and announcements about them, etc. 

 

Be honest in a useful way

Fralic points out that in most professions situations, people tend to keep it diplomatic and avoid being 100% honest due to the risk of tarnishing relationships and being disliked. Honesty in this case sets you apart from the rest, and shows that you prioritize the topic in hand over being liked. It however, does not mean that you should be completely socially oblivious and disregard everyone’s feelings. He suggests you be honest but also make sure to make it about something that is useful to them. After all, it is all about adding value to the interaction, so make sure you have something valuable when you take the risk of being 100% honest. 

Chris Fralic lives by these principles and believes they will take anyone a step closer to building a strong, high value network and exponentially contribute to your reputation if followed consistently.  

The Most Effective Way to Sell, Backed By Science

According to a recent survey by TOPO, it takes at least 18 touches to connect with a single buyer. With call back rates declining and consumers becoming increasingly wary of traditional sales tactics, it’s becoming more and more difficult for businesses to reach customers.

Thankfully, there’s one sure-fire way to effectively reach prospects and customers – personal referrals and introductions. From the top of the funnel to the bottom, personal referrals are the golden ticket to success in B2B sales.

1. Customer acquisition

Personal introductions are potent from a customer acquisition standpoint. When we hear about a company via a friend or a close connection, we are more likely to trust it as compared to other forms of advertising. This is why referrals convert at a 3-5x higher rate than average. We trust our close connections not to lead us astray.

2. Customer retention

Not only do referrals increase customer acquisition, they also increase retention rates. Personal referrals and introductions are, in essence, a form of precision targeting. Existing customers know their networks well and tend only to make referrals to those individuals they believe are best suited towards a particular offering. Referred customers are thus more likely to stay with a brand for a longer time. They boast a 37% higher retention rate compared to non-referred customers.

3. Customer value

What’s more, referred customers also contribute most positively to the bottom line. Referrals, because they’ve been vetted by current customers as a good match for a particular offering, tend to have higher levels of engagement. They also tend to be more likely to upsell. A study by the Wharton School of Business found that a referred customer has a 16% higher lifetime value than a non-referred customer. Referrals are a direct route to increased revenue.

 

What You Need to Know Before Selling Your Business

Selling a business is a multi-faceted process. How do you determine what it's worth? How do you find a buyer? How do you keep your competitors, customers and employees from knowing it's for sale? What are all the steps involved?

Let's look at these questions and more with eight tips for maximizing the sale of your business.

1. Know the overall process before you start

The very first step is to learn about the mergers and acquisitions process and how businesses are valued.

When you understand the process, you also know to give yourself enough time. It can take anywhere from 1-2 months just to value the business and draft the Offering Memorandum properly. Once on the market, it is common to take 6-11 months to sell, according to BizBuySell's Insight Report.

Do some research on the process itself and understand the key steps, before you jump in. Here's a checklist of what to you'll want to get familiar with:

  • Valuation and Maximizing Value
  • Confidentiality
  • Engaging Buyers
  • The Offering Memorandum
  • Management Meetings
  • Negotiation and Deal Structure
  • Letter of Intent and Term Sheet
  • Due Diligence
  • Closing Documents and Process

2. Understand Valuation

Knowing how to value a business is not required, but an understanding of what buyers will look at, and how it impacts value is critical. For instance, many business owners assume the value of their company is based on revenue. In fact, cash flow and EBITDA (earnings before interest, taxes, depreciation and amortization) are the primary metrics for determining value. Growing revenue at the expense of cash flow, will often degrade the value of the business.

Also keep in mind that it's not all financial. Buyers look for things like scalable infrastructure, strong management that is not dependent on the owner, customer concentration, and growth capacity.

3. Don't waste money on a Fair Market Value report, but do invest in valuing the company

Fair Market Value reports have their place, but it's not in the sale of most small businesses. They attempt to give a hypothetical value based on a hypothetical buyer.

What you really need, is to understand the many different values that will be assigned to your business--under multiple scenarios and by multiple types of buyers. So, don't skip the valuation process--that will cost you in the end--but invest your money in an analysis and consultation on the value of your company, specifically in the context of a sale.

4. Skimping on the Offering Memorandum is like selling a house with no photos

The Offering Memorandum (which can go by many names) is the presentation of your business. Don't settle for a teaser and a short, template-based business profile. Be sure to have an Offering Memorandum that offers a substantial presentation of your operations, products/services, management, senior staff, major accomplishments, significant risks, detailed financials, and future outlook.

5. Don't blow it with the teaser

The teaser is the short, usually 1 or 2-page, anonymous profile of your business. It's the tool that is used to engage buyers without giving away the identity of your business. However, a simple copy/paste could blow it. All too often, Googling a few lines from the teaser will bring up the selling company's website. Don't copy/paste into your teaser, or your confidentiality could be blown too.

6. Maintain confidentiality

Two of the major ways to protect confidentiality are:

  1. Use a third-party to engage buyers. How can you engage a buyer on your own without them knowing who you are? There are hack methods, but they are ineffective. Most business owners hire a business broker or an M&A advisor. A business broker will help locate a buyer and protect confidentiality, while an M&A advisor will also help value your business, write the Offering Memorandum, help negotiate the price and terms, and manage due diligence and closing.
  2. Use an effective Non-Disclosure Agreement (NDA). An effective NDA will be specific and detailed, without unnecessary road blocks that don't belong there. For example, the NDA is not the place to protect a broker's commission, and non-standard NDAs can sometimes get in the way more than they protect.

7. Negotiate the deal, not the price

Business owners who focus on nothing but the purchase price get out-negotiated. If you ignore deal structure, tax treatments, non-price financial consideration, and intangibles, then you will end up leaving money on the table.

8. Due diligence is the road to closing, not the obstacle

The faster you respond, the more transparent you are, and the more you disclose, the more comfortable the buyer will be. That gets deals closed and reduces your own risk.

Four Methods of Competitive Advantage

Four Methods of Competitive Advantage

Businesses are constantly seeking competitive advantages in the marketplace. There are many different ways in which this can be done, but many will focus on a few tried and true methods of gaining a leg up on the competition. These methods can generally be classified into about four different primary categories. Both Stanford University and the University of Cambridge cite Michael Porter's broad and narrow categories of competitive strategies as the basis for understanding how businesses try to compete.

Expert Advice to Help You Prepare to Sell Your Business

Expert Advice to Help You Prepare to Sell Your Business

As glamorous as selling your business may sound, entrepreneurs who’ve been there will tell you that it’s an incredibly stressful, time-consuming process fraught with dozens of moving parts and truckloads of paperwork. If you don’t hire the right financial, legal, tax, and business advisors to help shepherd the sale through, you’re doing yourself a great disservice.

How to use outside investors to strengthen your business

How to use outside investors to strengthen your business

Sometimes you need to share a couple pieces of the pie in order to eat your fill. No, I'm not talking about actual pie. I'm talking about the pie chart we keep in our heads when we start to carve out shares in our business. Like a lot of people, my gut tells me to hold on to as much of that pie as possible, but that's not always practical when you're just starting out.

What Is Your Business Really Worth?

What Is Your Business Really Worth?

"For many owners, the answer to one question determines their ability to leave their companies: “How much money will I get when I sell?”

This question is indeed critical, and answering it is the second step of The Seven Step Exit Planning Process™. Realistically, you can’t exit your business unless you achieve financial independence, and the primary source of that independence is likely to be the funds you receive for your business when you leave."

How Four Successful Entrepreneurs Find Balance (Article From Chase Business Banking)

How Four Successful Entrepreneurs Find Balance (Article From Chase Business Banking)

"Work-life balance is tricky for most modern workers. But for many small business owners, balance can seem impossible to achieve—especially in the early stages of launching an enterprise. It's difficult enough to find time to unwind, connect with friends and family, exercise or even watch an episode or two of a TV show when you work a standard 40-hour-a-week job, never mind while pouring what can feel like every last waking hour into a beloved business venture."

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