If you have had a successful career in sales, then your skill set is well matched to becoming a successful business owner. You’ve already built a solid foundation in selling; perhaps the most important aspect of many businesses. There may be other areas where you need to build strength, but there is support in doing so as a business owner. First, let’s look at what skills you already have:
1. People Skills:
Salespeople understand what drives people, and they can interact in a way that builds trust and confidence. This is a fundamental skill that not everyone possesses.
2. Understanding the importance of knowing what you are selling:
There are many ways and things to sell. Understanding whether you are selling a product or solution is key. Selling a product requires knowledge of both the product and the customer’s business environment in which it will operate. Selling a solution requires knowledge of the customer’s business and how you can provide a service that will be of greater value than the cost you offer. Successful salespeople understand this and how to articulate the benefit to the customer.
3. Business acumen:
In some ways, it is more important for salespeople in the B2B environment to have business acumen than in the B2C environment. Selling to a business requires knowledge of the business, the competitive landscape, operational challenges, and more. Selling to a consumer requires knowledge of consumer demand, buying characteristics, brand, and of course other aspects. Successful salespeople understand their customers and can make good judgment in the domain in which they operate.
4. Lead generation:
Finding customers willing to buy—whether B2B or B2C—is crucial for a business to succeed. Those who have been successful in creating demand, rather than simply selling into existing demand, are most impressive. For example, it’s not hard to sell iPhones, but having the vision to create the demand was pure genius. Successful salespeople understand this requirement and can find—or create—the demand in the market.
5. Ability to close:
Without closing, it’s just a conversation. Successful salespeople understand the timing and heartbeat of a deal. They instinctively know how to build confidence, avoid being pushy and when to push forward to close.
Having developed these traits over the course of your career provides you with an excellent foundation for success as a business owner. Now, you may need to hone-in on some of them, and you may need to enhance your knowledge of running a business on the operations and finance sides. But understand that business owners rely on experts to help.
Regarding operations, there are business models where operations are largely handled on behalf of the business owner. For example, some B2B franchises allow the franchisee to focus on the customer while the franchisor handles delivery. This allows you as the business owner to work “on the business instead of in the business”.
Regarding finance, it may seem intimidating to think about not only working toward a sales target but also owning a P&L. However, there are plenty of books and online training courses that can help fill any gaps in your knowledge. In addition, it is important to keep things simple, and when it comes to managing a P&L this means spending less than you bring in. In other words, make sure you have a profit, not a loss.
A simple formula for this helps show how to walk down from Revenue to Earnings:
Revenue – Cost of Sales = Gross Margin
Gross Margin – SG&A (Sales, General, & Administrative overhead) = EBITDA*
(*Earnings Before Interest, Taxes, Depreciation, and Amortization)
EBITDA – Depreciation and Amortization = EBIT
EBIT – Interest and Taxes = Earnings
When your earnings are positive you have a profit; when they are negative, you have a loss.
As a business owner, you will work with an accountant who will advise you on the details of which expenses fall under which category. Your accountant will also advise you on how to manage your balance sheet, which is simply a statement of the assets, liabilities, and capital of the business at a particular point in time.
Don’t worry too much about the financial aspects you don’t yet know, lean on experts and you will learn—the same way you will lean on legal advisors. You’re not looking to become an accountant or lawyer. A good business owner delegates those tasks to trusted advisors and pays attention to the potential risks and business outcomes.
If you’ve been successful in sales and feel an entrepreneurial drive gearing up inside of you, now may be the time to make a move towards your own business.
Proudly authored by
Richard Nohe
Managing Director, USA
