Selling Your Business to Your Business Partner

The following excerpt is from Mark J. Kohler and Randall A. Luebke’s book The Business Owner’s Guide to Financial Freedom.

Selling your business to a partner is probably the most common ownership transfer among small businesses. The reason is, your partners have a clear picture as to the value of the business, its potential, and what they need to do in order to replace you in the operations.

Selling to a partner is often one of the easier transfers to handle legally — not that partners don’t have their battles and disagreements — but most buying partners want to make the transition smooth and get the selling partner out quickly and painlessly. Many times, I feel that partners are amenable and anxious to define the transaction and process so that they themselves can utilize the same method with a good conscience in the future.

The document that typically lays the groundwork for a partnership sale like this is called the “Buy-Sell Agreement.” These types of agreements are drafted daily by law firms around the country and are actually implemented for more reasons than a partner wanting to sell.

In a more elaborate Buy-Sell Agreement for a more mature or established partnership, the document will cover issues of divorce, death, disability and a requested departure or exit. I call these the “Four Ds,” and each is important to address with predefined terms.

The primary purpose of the Buy-Sell Agreement is to define the procedure for the transfer of ownership, price, terms and transition well in advance of any event causing a transfer. This is a powerful tool because it prevents a partner from holding another partner hostage at a price or process in the heat of emotions when the transfer is needed.

For example, if all partners understand the process to determine the value well in advance, then they can work more clearly toward increasing the value of the business. Each party also knows that they’re all held to the same equation and process no matter what side they’re on. This way, it will be fair when the time comes for each partner to leave the partnership (at least, that’s the goal of the document and can certainly minimize the chance of a lawsuit). Following are some details you need to know about the Buy-Sell Agreement.

Determining the value.Most Buy-Sell Agreements require the partners to agree to the value of the company on an annual basis and record it in the annual partnership meeting. This may seem arbitrary, but if everybody agrees (typically requiring a unani­mous vote) and everyone knows the value applies to every­one, then who cares what anyone from the outside thinks? If the partners can’t agree, then a third-party appraiser is brought in to do a formal valuation if a buyout is triggered during the upcoming year.

Terms. Oftentimes, the terms are based on a note, with interest, paid out over five to 10 years. This can obviously create the retirement income a partner is looking for, and over the period of payments, it will spread out the tax bill as well. Some Buy-Sell Agreements require the remaining partners to obtain a loan for a good portion of the purchase price and then finish off the rest with a Note. This allows the departing partner to invest the initial money received wisely to create additional cash flow and prepare for when the payments under the Note end.

First right of refusal.  Typically, there’s a first right of refusal that must be given to the remaining partner(s) when a partner wants to leave or sell. This means that before a partner can run out into the open market and look for another buyer, they first have to offer their ownership interest to the other partners. This obviously can create some hurdles for the partner wanting to sell because they first have to find a third party willing to buy into a partnership where they may not be welcomed with open arms, probably be in a minority position, and then have to wait around for the other partners to exercise their first right of refusal. But, again, it’s a protection mechanism that “cuts both ways” and protects all the partners.

Security. To protect both parties, there can be a provision requiring the departing partner to sign a noncompete, and also the remaining partner or partners to “pledge” the partnership interest they purchased as security or collateral for the Note they’re paying off. Thus, if the buying partner(s) defaults, the selling partner can come back into the company as an equity partner to try to recover the remaining sales price or value sold in the original agreement.

It’s OK for a partnership not to have a Buy-Sell Agreement in place, but it can increase the tension in the case of a partner selling when the remaining partners didn’t foresee the situation and don’t have the wherewithal to buy out their partner. In these situations, I tell the partners to turn immediately to their partnership agreement (typically an LLC Operating Agreement) to understand what the governing document allows for when it comes to a partner who wants to get out or sell.

If you’re in a partnership and you have the slightest thought that you might want to sell in the next 10 years, and your partner might just be the buyer, then implement a Buy-Sell Agreement immediately. Don’t mess around with the disaster that can be created in a partnership when it becomes volatile or a partner up and decides they want out.


For Better Teamwork, Let People Choose Whom They Work With

Next time a project requires your colleagues to divide into teams, consider letting them choose for themselves who their collaborators are.

Researchers from Ohio State University, the University of Michigan and the University of South Carolina recently set out to determine what makes people cooperate well — especially because evolution pits beings against each other and human cooperation counters this instinct.

They found that teams thrive when members have the ability to pick and choose who they’re working with. Chances are, they’ll be more effective at working with those who are already established members of their network.

The study, which appears in the Proceedings of the National Academy of Sciences, asked 810 participants to play online games together. Each player began with 1,000 units of money which added up to $1. If one player was willing to give another player 50 units, the recipient would gain 100 while the provider would forfeit only 50.

Some games were made up of random groups of people, while others involved small groups of people who were connected to one another, similar to how humans tend to congregate in real-life scenarios. Within each of these two types of arrangements, the researchers allowed some teams to be static, meaning they couldn’t add or drop people from their teams, and some to be dynamic, allowing such flexibility.

Information about certain players’ reputations for sharing money also factored into some games. However, the researchers found that those with positive reputations were not more coveted teammates. The groups that collaborated best played in teams with those they were connected to and had the ability to swap players on their teams.

“What really seems to matter is the ability to alter the structure of a network,” study lead author David Melamed said in a summary of the findings. “And the pattern of relationships also made a difference. Those in a known cluster with multiple connections collaborated more, which seems intuitive if you think about how we interact in the real world.”

While the study was supported by the U.S. Army to gain insights into what structures could promote competition and thwart enemy forces, Melamed noted that the findings could be applicable in the workplace as well.

It may seem beneficial to introduce colleagues who don’t normally interact to spark interdisciplinary thinking, but the results of this study indicate that giving co-workers who have a rapport with each other the autonomy to form their own teams might yield more results.


The 4 Most Common Troubleshooting Scenarios and What to Do About Them

The following excerpt is from Perry Marshall, Keith Krance and Thomas Meloche’s book Ultimate Guide to Facebook Advertising with guest writer Traci Reuter. Buy it now from Amazon | Barnes & Noble | iBooks | IndieBound

What do you do when your Facebook Ads tank? It’s time to troubleshoot!

Following are the four most common troubleshooting scenarios we see most often when running campaigns and what you need to do to salvage them.

1. Zero conversions

You launch your campaign, 24 to 48 hours go by, and you’ve got nothing. Alarms start to go off in your head. This is the worst of all scenarios.

First, verify that the Facebook pixel is on every single page. Start by checking every URL in your funnel. Click on the URL in every ad that has zero conversions and verify that the pixel is there.

Next, look at is whether you have the correct pixel on every page. Go to Ads Manager, select all tools in the dropdown menu, and then go to pixels. Once you’re there, you’ll find your ad account Pixel ID on the right side. Then you’ll want to cross-reference that Pixel ID with the pixel the Facebook Pixel Helper is listing. Make sure these two numbers match up on every page of your funnel.

Next, make sure you’re optimizing for the right conversion event and that your reporting columns match. You can verify the conversion event you are optimizing for at the ad set level.

Once you’ve verified that you’re optimizing for the correct conversion event, go back to your reporting columns and make sure that’s what’s being shown. If it isn’t, customize your ad report columns to show the correct conversion event. Simply select the correct conversion event that you want to show up in your reporting, and then save this reporting view as a preset. Name it something that makes sense to your campaign, and then save it as a default view so that it will be the first thing you see in your reporting. After you’ve verified that all the pixels are on the right pages, check and make sure all the URLs in your funnel are loading. If this turns out to be the case, you’ll need to have someone resolve what’s making the URLs load slowly.

If you’ve made it this far and still haven’t found the culprit, check the landing pages. Make sure all the call to action (CTA) buttons on all your URLs are working properly. Click on every single CTA button or link and make sure they’re going where they’re supposed to go. The final thing to look for in this process is to make sure that your landing pages actually have a CTA button or link..

2. Click-through rate (CTR) is high — cost-per-click (CPC) is low

CTR is the percentage of people seeing your ad who click through to it. In this case, we’re referring to the link CTR, and not the general CTR, which measures any clicks on your ad. CPC is the cost per click each time someone clicks through from your ad to your URL. A CTR over one percent is considered high, a low CPC targeting consumers is typically under $0.50, and a low CPC in the business to business area is usually $1 or less.

You might be thinking “It seems like a high CTR and a low CPC would be a good thing,” but not if you’re not getting any conversions or your cost-per-action (CPA) is high. There are three potential issues in this case — landing page, ad scent and targeting.

If it’s your landing page, people are clicking on the page but not converting. If it’s your ad scent, you don’t have any scent between your ad and your landing page. If it’s your targeting, you’ve been sending unqualified traffic to your page, and it’s time to take another look at your targeting.

If your landing page is the culprit, you should consider split testing your landing page. Average conversion rates for a landing page are around 20 percent, and if you’re running below 10 percent, you’ve got a problem. Rework your landing page, your registration page and your sales page, and see if you can increase your page conversion rates.

Ad scent is easy to overlook but pretty easy to fix. Look at your ad and look at your landing page — are there any similarities or familiar components?

Interest targeting seems like something you’d get right, but we’ve often seen people where people target an audience that really has no correlation with their target market. Take a little time to make sure you’re putting your ad in front of the right people.

3. Social shares are high — conversions are low

You might expect that if you have an ad that gets super crazy social engagement — people liking, commenting and sharing — that you’d get great conversions. That’s not always the case. If this happens, especially if your ad is getting lots of social shares, the first thing to do is re-evaluate your campaign objective. If you’re running a campaign with a traffic or page post engagement as the objective, that’s what the Facebook algorithm will give you — traffic or engagement but not conversions.

The next thing to look at is your ad copy. Is your hook strong? Is the copy leading to the next step in the customer journey?

Another possible solution to high social shares with low conversions is to rework your offer. If you’re getting high social shares, your ad is resonating with your audience and you’ve got a solid hook. It’s most likely the offer that’s missing the mark.

The final thing to consider is your ad copy and creative. It’s possible your ad is engaging people for the wrong reasons, and they totally miss the point that would lead them to convert because they’re focused on the wrong thing.

4. Relevance score drops or is low

Before you can begin troubleshooting this scenario, you’ve got to understand what relevance score is. It’s a huge priority for Facebook to only show people ads that are relevant to them. Facebook determines relevance score based on the positive and negative feedback they expect an ad to receive from its target audience. As people interact and provide feedback on the ad, Facebook adjusts the relevance score of the ad.

While relevance score isn’t the only factor in a poor performing campaign, it can impact your CPAs and conversions. A low relevance score is ultimately the result of a poor message to market match. Rewrite your ad copy to better connect with your target audience. Make sure your copy is hitting on their biggest pains, desires, and fears. Focus on taking your prospect from their undesirable before state to their desirable after state.

Original Article:

What Business Leaders Are Getting Wrong About Bias Training

Adapted from Disrupt Bias, Drive Value: A New Path Toward Diverse, Engaged, and Fulfilled Talent (A Rare Bird Books paperback original; November 14, 2017. by Sylvia Ann Hewlett, Ripa Rashid, and LauraSherbin.

It’s perhaps the most famous case study in the young history of attempts to combat bias. In 1952, the Boston Symphony Orchestra introduced “blind auditions”: to reduce gender bias in hiring, orchestra directors held auditions behind a screen.

As the legend goes, the intervention appeared at first to have a surprising result: that there was no bias in the audition process. The screen made little difference in who made it past the first round of auditions. Then, suspecting that the click-clack of high heels permitted judges to identify women as they entered, the hiring committee asked the musicians to take off their shoes.

Suddenly, the judges could focus on the music itself — and far more women made it through to the second round of auditions.

Other orchestras began adopting the Boston Symphony’s approach in the 1970s. By the 1990s, many saw increases in the number of female players. The New York Philharmonic, for example, reached 35 percent female musicians by 1997 — a dramatic increase over having zero female players for decades. One study of eleven major orchestras found that up to 55 percent of their increase in new female hires could be attributed to blind auditions.

The broader impact of blind auditions has been revolutionary. Not only have they spread across the music world, they also serve as a parable for bias busting in business books.

A sure sign of a legend, parts of the story even appear to be mythical — we couldn’t trace the high heels detail past secondary sources. High heels or no, the tale of the Boston Symphony Orchestra’s blind auditions — and peer-reviewed research about their impact — has helped many business leaders understand the enormous role bias plays in how they hire, evaluate, and promote employees.

Unfortunately, the insights many have drawn from this intervention neglect its most important lesson. Rightly convinced that bias exists and that it must be largely unconscious — most business leaders must tell themselves that they’re choosing the most qualified person for a given position — organizations have invested heavily in bias awareness training. The idea is to make us all aware of our biases so that we can recognize them and resist acting on them.

Yet, there’s little evidence that bias awareness training accomplishes its goals. There’s even evidence, in fact, that it may do more harm than good. And the focus on bias awareness ignores the Boston Symphony’s most important lesson: that you must pinpoint where bias is happening, and then create a system (such as a screen and shoeless musicians) that mitigates that bias or prevents it from influencing decisions.

Taking the path that most bias-busting programs have missed, our approach begins not with cultivating awareness of bias among leaders, but with studying the experience of bias among those who are led.

Awareness of bias isn’t enough to stop it.

Asking individuals to fix their own biases fails, as a standalone intervention, to address systemic pressures that reward “fast thinking” or “gut” decision-making, pressures that ensure current leadership archetypes remain in place.

When we interact with another person, whether as a coworker, subordinate, supervisor or interviewee, we make countless “fast” decisions and judgments that add up to our opinion of that person. It’s impossible to expect people to constantly call out their own bias, accurately note it, and appropriately compensate for it throughout an hour-long interview or promotion committee meeting, much less throughout the months or years that make up a working relationship.

What would an effective solution consist of? The answer, we posit, is not to expect every individual to successfully identify and alleviate every possible instance of unconscious bias that they may exhibit. Instead, we identify conditions that cool down bias where it counts the most — when employees feel misjudged by leaders on their potential to succeed.

With its blind auditions, the Boston Symphony Orchestra didn’t discover a way to get audition judges to recognize and compensate for all of their biases. It found a system that prevented those biases from influencing their judgment.

Unfortunately, for most decisions being made in corporate America, there’s no way to create the equivalent of a blind audition.

In most organizations, the solution set will have to be more complex than putting up a screen and asking applicants to take off their shoes. It will have to target both manager behavior and the culture that shapes the employee experience. And it first requires individuals to understand precisely where bias is felt, so that organizations can map, measure and disrupt it where costs to individuals and their organizations are the greatest.

“There is something truly insurgent in saying, ‘Hey, let’s go look at the people who are impacted by bias, listen to them and then figure out solutions based on that,’ instead of starting top-down,” Philippe Krakowsky, executive vice president and chief strategy and talent officer at Interpublic Group, told us after we shared our methodology with him. “In the past, we’ve known bias exists, we’ve known that it permeates institutions, and yet we’ve approached it in a way that is very process-oriented — and not very connected to its effects on the individual.”


How Marketing and Advertising Are Bound to Change In 2018

Digital marketing hasn’t seen any major shifts in a while. Sure, we had to optimize our websites for mobile user experience, tweak SEO a little as the algorithm gods required and make a few other minor changes. Social media has been booming, too — but nothing very thought-provoking.

This new year is bound to be a different story, and we can’t sit around and wait. Look at what’s already happening: social media is changing, the law is changing, and there are murmurs about how net neutrality (or lack thereof) will affect digital advertising. It’s easy to predict the industry will face significant changes in 2018. Here are four key aspects that will shape the new landscape.

1. Privacy.

One successfully could argue the internet is funded mostly through ads. Websites use cookies that allow companies to target their customers based on what those consumers view in their own browsers. But users constantly are changing devices, and that makes it difficult to keep track of all the consumer touch points. Even savvy marketers are working hard to determine the channels with the most impact and justify their methods to clients.

Still, it’s doable. Robust marketing tools can track and connect user data to target individuals. But certain privacy concerns make this a little harder for internet advertising.

Ad blockers are just one of the challenges. According to a PaigeFair report published in January, 11 percent of internet users employ some type of ad blocker — a 30 percent increase from the previous year. Consumers want to protect their privacy, security and time from ad interruption. To curb this, some websites use walls that prevent browsers with ad blockers from viewing their content. These sites ask users to manually disable the blocker, but 74 percent of people in the PaigeFair report simply abandoned the site.

2. Live video.

Visual content has become more popular on the internet, and many companies are poised to make this their primary communication tool in 2018. That means rich media, creative videos, GIFs, memes and more are bound to be trendier this year. And there’s a good reason for it: Users interact better with visuals.
Of all the options, live video is the one to watch. A 2016 Buffer survey discovered more than 80 percent of marketers wanted to create more video. At the time, an impressive 42 percent wanted to target live video. In the same year, Facebook reported live videos were seeing as much as triple the watch time as traditional video. It also was garnering 10 times the comments. Live video is so effective because it’s authentic, human and littered with errors.

It’s not just live video versus recorded video — it’s live video versus everything. According to Livestream, 82 percent of users would rather watch a brand’s live video than read the same company’s social-media posts. A close 80 percent would rather tune in to a live video than read a blog post.

3. Artificial intelligence (AI).

Think it’s too early to talk about AI’s impact on marketing and advertising? Think again. AI already is entrenched in our daily lives, and it’s quickly becoming a rib in marketing. Worldwide, 58 percent of chief marketing officers believe companies will have to compete within the AI space to succeed in the next five years.

Enter AI marketing. This is how to bridge the gap between data science and marketing. Technology enables marketers to sift through a drastically multiplying data load to unearth insights that will help them provide value to target customers while gaining returns on their investments. Even better, this form of marketing doesn’t have to to take up all their time — they can automate much of the tasks to run in the background. With so many benefits, why would AI be incorporated into marketing strategies?

Over to you.

Whether 2018 turns out to be a good or bad year for the industry wholly depends upon the stakeholders in this marketing disruption. Professionals must begin to study the trends (if they haven’t already) and adjust their current strategies. What they have right now might not get them past the first quarter of what’s sure to be a highly competitive year.


Executives of Yesteryear Would Have Scoffed At These 4 Critical Leadership Skills

There’s a particular brand of humor conjured by “Mad Men” and other retro workplace dramas. The outdated office culture — from the way women are treated to the nonstop drinking on the job — provides a throwback reason to snicker and commiserate about the “old days.”

Add in the prototypical business leader of generations past (rigid, fierce, gruff and intimidating), and you’ll see a picture that’s completely different from the modern corporate climate.

Today’s successful business leader is an emotionally intelligent, collaborative visionary. Explain that to your grandpa, and he’ll likely have a good laugh. But if you want the bottom line on what it takes to be a business leader today, read on.


Empathy is the ability to feel what someone else is feeling — to put yourself in his or her proverbial shoes. When your middle manager, Caroline, tells you her son is sick, you know she needs to pick him up from school because she’s a single mother. An empathetic person immediately understands the stress and frustration Caroline must be feeling, and validates it. The empathic leader approves her request to leave early. In addition, the empathic executive empowers Caroline with the option to work from home during the next few days so she can tend to her son.

Business leaders of the past would have been indifferent toward Caroline’s situation, feelings or options. Today’s successful leaders recognize the critical nature (and bottom-line business impact) of taking care of their employees. They know that when employees are happy, they’re more likely to be engaged — and engaged employees are more productive.

Gary Vaynerchuk described it this way during a recent episode  of his “DailyVee” program: “You work for your team — they don’t work for you. How many times have you sat down with [them] one by one for three hours and asked them what they care about in life and how can you help them? That’s the answer, bro. How do you get your team to care? Care for them first.”

Data-driven decision-making.

Data-driven decision-making means relying on analytics to guide every business decision. Data-based evidence leads to insights, and executives then can turn those insights into actions that position the business for success.

Back in the day, technology limited the amount of available data. It made sense to make decisions based on a combination of gut feelings and past experience. Today, however, the truth is out there, and 60 percent of companies regularly analyze four or more internal data sources before making decisions.

“Every company has its problems, and often data-driven methodologies can help solve these problems,”explains Eran Levy of the business-intelligence (BI) platform Sisense . “Whether it’s high customer churn rates or ballooning operational costs, data analysis can help you understand where your business is stumbling as well as suggest possible causes and solutions.”


To succeed in business in the past, you had to succeed on your own. Success, power, raises, promotions and market share resulted from what you could do better, faster or cheaper than the next guy. Building, inspiring and motivating a team didn’t make sense.

Today, we value the power of accomplishment in groups. We know we can get more done if we work together. The Larry Tates of the world never would have asked direct reports for ideas or direction. He was the boss, and he dictated thusly. In his mind, lower-level employees were supposed to work their way up and respect their elders.

Today, however, successful executives are not only comfortable relying on their teams for new strategies, they actively foster a culture of collaboration.


Corporate transparency is a commitment to informing employees about what’s going on in the company, whether it’s positive or negative.

In the past, business leaders kept this information to themselves. Only those in positions of power needed to know the score. Today’s leaders understand that being transparent about company goals and earnings makes employees feel more valued.

Corporate-culture consultant Glenn Llopis reinforces the idea that transparency helps cultivate trust . “If you are transparent, especially during the worst of times, you actually strengthen your leadership as people begin to trust you as person and thus will respect you more as a leader.”

Be today’s leader.

Although business leaders of the past did help us get to where we are today, let’s stop relying on them for inspiration. It’s time to turn over a new leaf and embrace the modern executive.


The Winning Formula For Content Creation

When I was growing up in the 1980s and ’90s, information was a valued possession. It was rare and hard to get. You had to go to the library if you wanted to find information in any vast quantities. In the late ’90s, I got my first computer with a modem, and within a few chirps, beeps and other strange noises, I was blazing across the internet at 14.4k speed.

At the time, domain names were still $75 per year, and online video was not even on the average person’s radar. Now that the internet has been changing our lives for more than 20 years, information has gone from a rare resource to a commodity. It is freely and cheaply available almost 100 percent of our waking lives.

So that begs the question, in a world of cheap and free information, how do you stand out? How do you get people to take notice of you?

You could Google it.

But when I did just now, I didn’t get the answers I was looking for, which is all too common a problem with such a vast amount of information. Another problem with free information is that you often get garbage answers.

How many times have you clicked on a business article only to find that the “Top 5 Ways to Do XYZ” is a really list of the most basic ways to accomplish XYZ? Solving this problem is a big deal, and I guess that’s one reason Google makes the big bucks — they are the best of the worst at this. But all of that still leaves us with the original question.

How do small businesses stand out and get others to take notice of them? The simple answer to this complicated question is content. You must create content that is unique and adds value to the conversation. This is much easier said than done, though.

Content creation is a skill, not a task.

It takes time and effort to learn how to write well or sound good on a podcast. There’s not much most of us can do to look good on video, but at least we can make sure we don’t hurt ourselves by looking worse.

When you create content, your goals should be:

  • Entertainment: People want to be entertained, and injecting your personality into any content you create can be one way to entertain people as well as to make your content unique to you.
  • Information: I’m constantly asking content creators to make sure when they write they have strong points and don’t waste my time. I don’t want to read fluff. I want answers to my questions in a definitive way.
  • Consistency: So many people start creating content and can’t keep up with a regular schedule. No one wants to read the same information over and over again. Everyone wants something new, so give it to them.
  • To accomplish one thing: You should create very focused content with the goal of narrowing in on one subject. So many people record a video or write an article and want to go over 20 different topics, but that’s insane! Make those topics into 20 different articles and videos.
  • To tell them what’s next: The final goal of content creation should point the consumer of the content to what’s next. This could be more articles, a call to action, etc.

One question I often get is, how long should my content be? There is no magic number. The content needs to be as long as necessary to cover the information needed. Of course, there are people who will tell you the best length of time for a video is 3–5 minutes. Some magazines want 700–800-word articles. Entrepreneur wants 600–900-words.

Everyone has a different opinion of what the best length or time is. Many will quote stats about drop off points in videos after two minutes, but the truth of the matter is, the person likely dropped off because they found out they were in the wrong place, you answered their question, or you were boring. People will watch and consume content, but not if you are boring.

With the world literally at our fingertips, boring doesn’t work — unless, of course, your target market is members of the Dull Man’s Club ( If that is the case, people may consume all of your content, regardless of the boredom factor.

That is a much more complicated topic, because it depends on the type of business you’re in, and answering that question here would violate our goal to accomplish one thing on our should list.But to stay in compliance with the goal that follows (tell them what’s next), I can point you to my blog where I ask, is your content marketing selling before it’s helping?



Get Those Quotas Moving (Upward!) in 2018! 5 Things Your Salespeople Can Do.

Whether they had a tremendous 2017 or a difficult one, sellers likely hit the re-set button with the start of this new year. And that button push probably was accompanied by more aggressive quotas for those sellers to achieve in 2018.

So, what should sellers do to gear up for the coming year? As 2018 gets under way, here are five things I can share to help sellers get off to a good start.

1. Avoid stale quotes and proposals.

Unlike fine red wine, proposals that have been in the sales pipeline more than 45 days old aren’t getting better. Many of them, in fact, are likely to have”no decision”  outcomes.

So, if you’re the seller, what’s going on? There may be instances where your prospects have chosen a competitor and not given you the bad news. My suggestion is to send a snail mail letter, “return receipt requested,” to the highest level you’ve called on within the account. State in the letter how long the proposal has been outstanding, noting that you haven’t been updated on its status and that you intend to withdraw if you don’t hear anything back.

The hope is that your letter will cause the buyer to contact you and say there is still interest. If that’s the case, you can ask to revisit the opportunity (help facilitate a cost vs. benefit analysis) and see if a revised recommendation can be made. If your letter doesn’t elicit a response, you can safely remove it from your forecast. While that’s not the desired outcome, you’ll have the benefit of a more realistic view of the size and health of your pipeline.

2. Create add-on opportunities.

Sellers often believe that if customers have additional needs, they’ll proactively reach out. Certainly, close rates will be higher when there is an existing relationship vs. when sellers are closing new accounts. That’s why sellers should take a look at each client and try to determine potential business needs that might be addressed through the use of their company’s offerings; they should then proactively contact the key players who might be interested.

The key to initiating add-on opportunities is taking executives from latent to active need for a company’s desired business outcomes.

3. Be realistic with nurtured leads.

If the cost of your offerings exceeds $50,000, you may want to take a hard look at the entry level that nurtured leads provide. My view is that many of those leads get sellers in touch with people that are doing product evaluations. So, those people may not be working with budgets and have not identified potential areas of value/payback that can be realized through the use of your offerings.

Ask yourself if the contact you’ve been given is a potential champion who can provide you access to the key players you must call on to sell, fund and implement the offering being considered. If not, I suggest you treat the contact as a coach that may be willing to get you an introduction to a higher level that may then serve as your champion. My thought is to gain access to people who will see value in your offerings.

4. Ask for referrals.

Satisfied customers can be underused assets, especially if sellers can help them quantify results. My preference is that sellers break down benefits and values specific to titles and outcomes that have been achieved using those sellers’ offerings.

Once quantified, sellers can ask if their customers know of any other individuals or companies they could be referred to.

5. Plan a sales cycle ahead.

When I was in engineering school, I was a “just-in-time” learner in that I studiously avoided professors who assigned homework and also approached midterm and final exams with some last-minute cramming.

Some sellers follow my academic model — and that’s not smart: In terms of their year quota,  many sellers who are not YTD against their numbers believe they can close enough business in the last quarter to make up for their previous gaps. But this is a very stressful strategy, and there will be times when sellers run out of runway.

An alternative I’d suggest is for sellers to break their quota into monthly increments and multiply that number by the months in an average sales cycle. They can then estimate their close rates and set pipeline thresholds they should try to exceed.

Once they’re at the stage of interviewing committee members, sellers can then negotiate their activities and time frames via a written document with buyers (I call this pipeline “E”). Here’s an example of how to project ahead:

  • A seller has a $2.4 million quota ($200,000/month).
  • Her average sales cycle is four months and her close rate is 50 percent.
  • Therefore, her “E” target is to close $800,000 or more every four-month period.
  • At any time, if she is YTD or better, her E target will be $1.6 million in her pipeline.
  • In a given month, any shortfall from YTD must be doubled and added to that $1.6 million; business development efforts must be ramped up.

Being aware of YTD performance to date and projecting the sales cycle that’s ahead on a monthly basis can reduce stress levels during Q4.

And reducing stress is good, right? I hope these tips can help make your 2018 a great, and de-stressed, year.



Creating the 3-Bucket Cash Reserve System

The following excerpt is from Mark J. Kohler and Randall A. Luebke’s book The Business Owner’s Guide to Financial Freedom.

In order to have both liquidity and significant cash reserves, it takes more than just plowing cash into a bank account. It's a unique structure called the "Three-Bucket Cash Reserve System." This system not only ensures that you'll have enough readily available cash that's safe and secure, but it will allow you to earn a fairly decent overall rate of return on your money as well.

What I also like about the Three-Bucket System is that I could do it in stages. Once I got started, the reserves became such a comfort and strength that I truly wanted more. If I dipped into my reserves at all, for anything, good or bad, I was extremely anxious to get the money back into the system. I was addicted to the security and flexibility it offered me.

Start with the first bucket to build some confidence, momentum and better habits, then graduate to the other buckets. It's easier than you can imagine once you get started.

1. One Month's Personal Living Expenses

Of course, this one month's amount is going to vary dramatically from one person to another. Moreover, monthly living expenses can also fluctuate dramatically from one month to the next depending on what's going on in our lives. This unpredictability is what causes some people to stop right here and give up dead in their tracks. Don't do it!
To help calculate this amount and create a new mentality to saving and spending, only count your essential living expenses. Then take your total expenses for the year (as best as you can estimate them) and divide that number by 12. This monthly average accounts for the ups and downs in monthly expenses. Save that average amount each month and you'll get the bucket going.

This money should be in a separate bank account or even a separate bank from your other accounts (if your self-discipline is lacking a little). Here's the statement you may have trouble with: Don't worry about interest rates or investment factors. People are so trained to chase interest rates that they hesitate to simply have money available. Interest rates on liquid accounts are very low these days. Sure, two percent beats one percent, but just having available cash is more important. Just make sure it's accessible and liquid in the event of an emergency.

2. Two Months' Living Expenses

This is an additional two months' worth of take-home pay in your savings and is on top of your first bucket. Thus, you'll now have a total of three months of living expenses in reserve. Again, you can use an average of what this expense may be, and I encourage you to be generous. Fault on a little extra, rather than less -- you won't regret it. There's an ingenious way to slowly build these accounts: Deposit the distributions from your business into savings first before paying your living expenses. This bucket will be in a savings account similar to bucket one. Again, don't worry about interest or rates of return. This bucket has a far bigger purpose and benefit.

3. The "It Depends" Reserve

At this juncture, with one month's essential expenses pouring into the checking account monthly and two months net take-home pay in your savings, we now need to think about how much more money is enough to keep in your third cash reserve bucket. The amount of money you keep in this bucket will vary widely from person to person. That being said, it needs to be a significant amount. In fact, as an entrepreneur, this bucket will need to be much bigger, like six to nine months. This bucket may be funded with cash value life insurance -- there will be a death benefit, and the cash asset will be protected and guaranteed no matter what happens to your health.

Whatever your dollar amount needed to be to fill all three buckets, they need to be completely full before you save and invest for your retirement. In order to succeed in this process, these buckets need to be taken seriously.


What Aristotle Can Teach You About Marketing

Thousands of years ago, a guy named Aristotle had lots of ideas about everything from religion and ethics to medicine and science.

He also happened to be a very persuasive speaker — so persuasive that his teachings still shape the way we think about the world today.

But what does this all have to do with marketing?

 Aristotle developed an interesting theory about the art of persuasion. He believed that every persuasive argument relied on three pillars: ethos, pathos and logos. He believed that if you missed, or were deficient, in any one of these pillars no one would believe you or care about what you had to say.

His theory has been called  “the most important single work on persuasion ever written.” Here’s what Aristotle had to teach modern marketers 2,300 years ago:


Ethos is all about credibility. Aristotle believed that it doesn’t matter how well-reasoned or logical an argument is if the audience doesn’t trust the person who’s delivering the message.

This means that true persuasion starts before you even open your mouth. If you haven’t established yourself as an authority, you’ve lost before you’ve even begun.

Modern-day influencers like Seth Godin and Neil Patel have spent years regularly putting out valuable content to establish their authority. Major brands all over the world spend millions on public relations to ensure their credibility remains as intact as possible, otherwise all of the goodwill and trust they’ve carefully built over the years will be destroyed.

As Warren Buffett said, “It takes 20 years to build a reputation and five minutes to ruin it.”

For marketers, that means taking a good, hard look at your brand and the authority you have in your industry. The easiest way for a brand to develop ethos is to find common ground with your audience and establish your empathy with their problems. Aristotle himself believed the first part of any argument should be confirming your authority.


The second of Aristotle’s three pillars of persuasion is pathos, or the appeal to emotion. At the very core of our being, we are emotional creatures. Ignoring that fact can undermine your entire message, no matter how reasonable it may be.

Aristotle theorized that, to persuade someone, you can’t simply rely on reason and logic. You have to find a way to make your audience feel. Whether it’s hope, anger or even humor, marketers must connect their message to an emotion.

Advertisers have long understood the power of emotion in marketing. On the surface, Red Bull is just like any other energy drink on the market, but their marketing strategy is what truly makes them special.

Red Bull has invested heavily in extreme sports and organizing  highly-publicized stunts to connect the emotions of excitement and fun to their brand. Making audiences genuinely feel excited and thinking they can harness that emotion by purchasing a can of Red Bull.

For the average marketer who doesn’t have the ad budget of a multimillion dollar company, there are also less expensive ways to establish pathos with an audience.

Modern marketers should aim to present stories with characters and conflicts that can immediately capture an audience’s imagination and emotion. They should always be on the lookout for stories they can tell about themselves or their customers to tap into Aristotle’s emotional pillar of persuasion.


Aristotle’s final pillar is logos, which is all about logic and reason. While the philosopher believed that logos is the most persuasive of the three pillars, he also understood that logic alone would not be enough to persuade an audience.

For example, saying a product is going to improve someone’s life isn’t enough. As true as that statement might be, you have to show the logical reasoning behind why that product is useful and beneficial.

Too many marketers get caught up in the idea of “features-based selling.” They try to make a sale by focusing solely on the features of the product. Their mistake is that they assume their audience will be able to immediately understand exactly how useful those features are.

Marketers can’t simply tell people their products are awesome; they have to be able to show them.

Apple was a master at showcasing just exactly how their new products and features would help their audience. They’d combine storytelling with logic to create ads where audiences could see for themselves just how useful the new iPhone was, or why the Mac was better than a PC.

Marketers can take advantage of logos by learning how to better showcase the logic behind their messages. This can be achieved by explaining the context behind their logic, giving demonstrations of their product, or showcasing testimonials of happy customers to prove their logic is sound.


You may not need to apply all three pillars in every situation, and there are some occasions where it wouldn’t make sense to tap into all three. But most savvy marketers know they need to give every persuasive pitch all they’ve got, and more often than not, applying Aristotle’s three-prong approach to persuasion will get you and your business the results you’re seeking.