Tuesday, December 10, 2002

This is a page from my book, “How I Sold My Business: A Personal Diary”

I got word today that nothing is going to happen with Marty's other potential buyer. Apparently our asking price was too steep for them to even bother with a meeting. Frankly, this really pisses me off, because it either means Marty was bluffing and didn't have another prospect, he didn't do all of his legwork to qualify this prospect, or his much higher asking price scared them off.

What I mean by "qualifying a prospect" is to (a) make sure they have a real budget for the project we're talking about, and (b) making sure we're talking to the real decision maker. A bad salesperson will talk to anyone, and a good salesperson will make sure you're talking to a qualified prospect.

I mentioned earlier that Rob did a good job of "qualifying" the prospect that we met with, and since my early days of consulting, this has always been a flash point for me. When you think about it, a sales meeting is going to cost an employer hundreds of dollars, maybe thousands, and when you're in the business of selling a limited resource like time, in a sales meeting you're allocating that limited resource to a non-billing activity. If the salesperson hasn't qualified the prospect, this is a lot like throwing money away.

Any time we hire a salesperson I tell them up front, "I don't want to take our technical people out of a paid gig to go to a sales meeting with an unqualified prospect", and unless there's a big potential pot of gold at stake, it drives me insane to go on a sales call where a client hasn't been qualified. (Okay, okay, we did generate several hundred thousand dollars in revenue from one client that was completely unqualified, but we had been trying to get in to see them for years, so when they finally called us, we jumped. This is the only successful exception to the "qualified prospect" rule I can recall.)

Assuming these potential buyers really exist at all, it doesn't seem like Marty qualified them at all. He told us he thought our company was worth over $5M, we told him we were willing to sell for $2M, but the prospect thinks our price is too steep?! Man, I'm pissed off. I just had a long workout before writing this to try to burn off some energy, and I'm still furious.

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