"Selling Your House?"

Ten Steps for Discovering the Buyer's Budget

One of the toughest selling tasks is to discover the amount of money your buyer has available for a purchase.  Yet without probing the budget, you may fail to qualify the buyer (determine if the buyer can afford your product) and waste both your time and the buyer's time.  These strategies tell you if the money's there without making you come off as intrusive or manipulative:

1.  Before you probe the budget, review the pain.

The best transistioin into a budget discussion is to reinforce the reason that the budget exists: removing the buyer's pain.  Summarize the pain, then confirm that the buyer is willing to pay for its removal.  "Jim, let's see if I have this right.  You said that these are the greatest problems you're having with your current widget:..."

2.  Ask the money question.

In a matter-of-fact, cordial tone open the discussion with this non-threatening question: "Jim, do you have a budget set aside fo the solution to your problem?"

3. If the answer is no...

Respond with a softening statement to validate the buyer, followed by a question to initiate the budget discussion.  "That's not unusual.  How do you plan on moving forward?"

4. If the answer is yes...

Ask, "Could you share that figure with me in round numbers?" The key elements of this strategy are the words "share" and "round numbers"  Ask the buyer to "share" creates a psychological bond.  Asking for an approximation relieves pressure while still getting a dollar amount fairly close to what's going to be available.

5. If the buyer offers a budget figure you believe is too low...

Say, "That could be a problem."  This response also opens the budget discussion for further probing.  Consider these additional questions whe the proposed budget is too low:

• "What will we do if the investment needed is higher than you've planned for?"
• "In case we can't go first class, are there some problems we can leave unsolved if we have to?  Which ones?"
• "Are you really committed to solving these problems?"

6. If the answer is "yes, but I can't share that with you"...

Validate the unwillingness and apply "bracketing."  Bracketing identifies the low and high budget range.  Set the lower end of each range at the price you want to get.  (You'll see why at the next step.)  "That makes sense, and I understand.  Jim, as you probably imagine, we have many products that might solve your problem.  Some of our solutions range in price from $10,000 to $18,000 and others $18,000 to $35,000. I understand this is confidental informatioin, but off the record which range do you have in mind?"

7.  After the buyer selects one of the ranges...

Move toward the lower end of that range.  They buyer expects you to pick the larger number; surprise him or her by picking the lower one.  That's why you set the range in your brackets as high as you did.  "I thought you might pick the $18,000 to $35,000 range.  I see you closer to the $18,000 than the $35,000.  Is that fair?"

8. If the buyer insists that you reveal your price...

Reveal it.  If a specific price has been established and is documented in brochures or catalogues, simply announce the rpice.  However, if the price is negotiable depending on the extent and nature of the buyer's specific problem, quote a price high enough to seem reasonable (perhaps 20% over where you hope to settle).

9. If you're selling a big-ticket item and the buyer is unwilling or unable to commit a budget for the item...

Try selling smaller pieces.  Could you sell an initial fact-finding study?  Is there a one-day consulting project you could deliver?  Is there a 30-day trial you could sell?  maybe the buyer can't spend the entire sum without a committee but is able to spend a smaller amount.  Unbundle the product or service and sell what you can.

10.  Do your homework on the buyer's historical spending hapbits.

If you are selling other big-ticket items in the past, even if those items are unrelated to what you are selling.  Learn what this buyer is typically willing to spend to solve problems.

I hope you enjoy these tips from the book "Close the Deal".

Cheers,

Andrew

Business Laws That Small Businesses Should Worry About

Suffice to say it would take several volumes to include all of the laws that pertain to business, particularly if you start including state, city and county laws. There are thousands of business laws on the books, some of which are relevant to your business and others that are antiquated and have not been enforced since the 1920’s. No one, including your local law enforcement agencies, department knows all of them. However, it is important that you know the laws most likely to affect your business. Here are some of the categories of laws with which you should familiarize yourself:

• Employment Laws, includes laws regarding: hiring and firing of employees, overtime pay, child-labor, disability, worker’s compensation, unemployment, employee rights, employee safety and discrimination.
• Tax laws including laws pertaining to the filing of tax returns and payment of: sales tax, withholding taxes, corporate taxes, pass through taxes and both state and local taxes.
• Business formation laws including those pertaining to the specific business structure you have selected.
• Environmental laws, including recycling laws and the discharge of hazardous waste materials.
• Trademark and patent laws, plus all other such laws pertaining to ownership, inventions and/or intellectual property rights.
• Consumer protection laws against fraud or unfair business or advertising practices.
• Zoning laws, which typically include local ordinances that regulate: parking, advertising and signage, use of the land surrounding the business and even the type of business that is allowed to be conducted in a specific area.

These are just some of the significant legal categories under which you will find laws that affect most businesses. In addition, laws may pertain to the type of activity involved. If, for example, you are selling shares of stock you will need to adhere to securities laws and if you are operating a business that sells liquor you will need to adhere to the state alcohol laws. State laws may also dictate how contracts and legal documents will be written and enforced.

Just as you put together a business plan, you need to approach the legal aspect of a business in a systematic manner. Begin with the laws pertaining to the basics of starting a business. Do you need a business license? A permit? What laws pertain to opening a business in your state, city or county? Are you planning to hire employees? Will you be selling goods and therefore charging sales tax? Analyze each aspect of your business.

If you are in business for yourself, for example, you won’t need to familiarize yourself with employee laws until you are ready to hire additional staffers. Likewise, if you are in a service business, you typically won’t need to familiarize yourself with removal of hazardous waste. Review applicable laws in advance for each aspect of your business as you see it unfolding. Also, review all potential significant legal matters with your attorney. Ask questions and do not assume something is legal because it is common practice among other business owners.

If you should find yourself in violation of a law, take immediate steps to rectify the situation. Depending on the severity of the law, you may only receive a warning or a small fine from the local authorities. Typically, you will be given a time frame in which to make the appropriate corrections.

Zoning laws can often frustrate a new business owner. While you may be legally allowed to open a specific type of business in the zoned area, you will often discover that these laws affect how you may conduct your business.

It is important to take some time to familiarize yourself with all municipal, commercial and/or industrial zoning laws that could pertain to your business and ask questions of the local Chamber of Commerce and/or other business owners to make sure you are adhering to the details.