A new home construction subcontractor was seeking advice about the mystery of lost business because their book rate was less than 20%. This person was an electrician, yet the principles I present in this article apply to just about any small business. The opening remark began with a statement that they thought they knew why, so this theorizing meant they were actually uncertain and probably needed a trusted neutral opinion. Don't guess the reason for lost business when you don't know. Find out.

Many solo small business owners cannot state why they get business or why they lose business. We make assumptions, or just don't ask. Until you make it a priority to get both these questions answered, you'll never understand your strengths and weaknesses. Consider the dynamics of conscious marketing and sales efforts.

After the marketing is done and you find prospects the sales cycle is preapproach, approach, presentation, trial close, answer objections, and final close. Ask a trusted friend to tell you bluntly if you are weak in any of those areas. If you lack knowledge of basic sales techniques, it's time to learn. Marketing extends into the preapproach to understand how decisions are made and the price structure. The more you prepare and form a strategy, the more likely you are to succeed.

The small business owner in this instance felt his bid invitations were received to leverage the existing contractor on price. For some of the new home construction jobs he was told his proposal was cheaper, but they awarded the contract based on an established relationship. People buy based on trust, not just price. To win over an existing source you need to demonstrate outstanding credibility and trust. The mystery of lost business for this contractor was still elusive because the right questions were never posed.

People without any intention of ever buying from you may tell you outright to save both parties time, or perhaps they like you and keep you hanging on just to be polite. You could be the pawn they use to drive down the price, but I doubt it. Years ago US Air Force procurement officers proved that even on sole source items, just stating there was competition produced lower bids by an average of 10%. The new home construction companies in this case study already made it known that their quote requests went out for competitive bids. The final decision was not about price. In similar circumstances, any theory is not as important as finding out the real reason why you lost a contract. If a customer stalls without making an immediate buy decision, here are some follow up tips before an award is made.

My sales tips and advice for small business owners when calling about proposals that are pending is assume the contract is open. It must be because they didn't call you. Be positive. If your steps in the sales cycle are "hat in hand" then the lack of confidence factor could be killing your efforts. If you call about a proposal saying "Is the contract still open?", then your client is off the hook. The only answer to that question is either "yes" or "no", and the wording itself is an admission you didn't expect to win it anyway. These subtle differences in what you say could make or break your sales success.

Try open ended questions at each step in the sales cycle. Start your inquiry with phrases that encourage your customer to open up. For example, "How would you describe...", or "What steps do I need to take...", or "What would you like improved...", etc. These cannot be answered with one word replies. After your proposal is made, and at an appropriate interval for follow up, contact your prospect and state a new benefit that you offer that they may not have considered. Express your interest to do business, and finally ask for the order. "I'm ready. When can we get started?" is much more effective than asking if the order was placed.

Handle disappointments in a professional manner. After you know you lost a contract, or in this case 80% of the bids, keep your dignity and continue with the open ended phrases. State with confidence your ability to do quality work at a fair price delivered on time. Never accuse or complain about their decisions once they're made. Find out what you could do differently next time to become their subcontractor.

Finally, you may want to consider your niche. If customers don't open up when asked open ended questions, then it's probably time to admit the opportunity is not worth the effort. Your time studying quote requests and preparing proposals is costly. When a prospect is repeatedly indifferent, perhaps solo work with smaller contracts or individuals would allow you to grow even if it's in smaller steps.

In conclusion, show interest by asking about the needs of the client. Open ended questions or statements allow the customer to provide details that you may not get with a "yes" or "no" answer. Apply the open ended principles to be prepared in the marketing and sales cycle, and then deal with and learn from disappointments. If necessary, revise your strategy and redefine your market to deal with people who truly appreciate what you offer.

Whenever you and your home based business need money, think about using this secret formula. It is so powerful, you may be surprised at how quickly it works. If you work at home and want to make money like magic, this may be the one secret you need.

As you will see, the formula is easy to use. You can make it work for you in any work at home business – from a one-person operation to a company with over 500 employees.

Hold on, though. I want to take a moment to tell you the surprising way I discovered this formula.

I noticed a friend of mine was doing extremely well in his home based business. Even though the service he offered was expensive, he was swamped with new clients. He eventually hired two assistants and was making money hand over fist.

What was his secret to success when so many other work at home businesses were just hanging on? When I asked my friend about this, he said he did not think he did anything special. He did some advertising and had a Web site with a pretty good sales letter – and that was about it.

I looked at other home businesses similar to my friend’s. None of them was doing nearly as well as his. What is more, they were spending a lot more on ads than he was. The big difference, though, was that they worked at least 3 times harder than my friend did. I mulled over this puzzle.

Then, one day, it hit me. I had an idea what it was that was triggering his big sales. I went to see my friend right away. I told him I wanted to spend a couple of days with him at his office to see what his typical day was like. I also wanted to see how he dealt with customers.

He agreed. And, I was astonished at what I saw. We spent barely an hour at the office in the morning. After that, we sped off in the car to play golf. In the afternoon, we spent even less time. He told me it was like that every day - except when he was on vacation.

That was it. I now had an idea what his success secret was – even if he did not

The secret formula my friend used was the “scarcity factor.” Everything he did and thought was governed by scarcity – his time, his energy, and his money.

The other home business owners poured all their time, their energy, and their money into the business.

How can you use the scarcity factor and get the same spectacular results my friend did? Check out the 3 most important things he does:

1) Scarcity of Product. My friend lets prospects know that he has only a limited amount of product left. What is more, the price is going to rise. In order to get in on this great deal, they would have to order by a certain date. After that, the price was going up.

2) Scarcity of Time. My friend’s time is limited. He has only an hour in the morning to check messages, answer them, monitor his account, verify his warehouse figures, and record instructions to his assistants. In the afternoon, he has just enough time to write and send out an article, make a couple of telephone calls and pay bills.

3) Scarcity of Money. My friend seldom makes small purchases. He invests larger amounts in his business. Every month, he expects and usually gets higher returns.

There you have it. This is the secret formula to help you make money in your home based business with only a couple of hours of work. It is the same secret my friend uses without realizing it. It works like magic for him and will do the same for you.

Buying a business is an important move and a life changing experience. Checking the financials of a business is the first step of course when making a decision to purchase. Ensuring that there is adequate cash flow to support the business, support you as the owner, and pay off the debt in a reasonable amount of time makes sense. But the next step that is at least equally important is making sure that the business is the right fit for you, the new owner. Make sure that you wake up in the morning say to yourself “I get to go to work today” not “I have to go to work today.”

Determining that the business is a right fit for you is varies from person to person. If you’ve been in the auto repair business all of your life, then owning a muffler shop or a quick lube service might be tailor made for your personality and life style. But, if you are thinking of buying a pizza parlor and have never worked in food service before, that’s almost like buying a three piece suit without ever trying it on, or a new sports car without taking it for a test drive first.

If a business is new to you, then work in it for a while before you make your decision. If you’ve picked out a business in which you think you have some interest, tell the seller your offer is contingent upon first working in the business with him for 30 days to determine that the fit is right.

If you haven’t yet picked out a business and are just curious about an industry, nothing replaces getting an entry level job in that industry to get a feel for it.

If you buy a business you’ll own it for years to come, and perhaps for the rest of your life. Making sure that you truly enjoy what you are doing is the real American dream, so take the business for a test drive.

Do you have enough information on your customers to give a brief description of them in three minutes or less? If not, start immediately paying more attention to the customers that purchase your products or use your services. The following are sample descriptions: age, sex, style of clothing, colors they like, type of food they eat, where they live, with or without children, and whether or not they shop with friends and family or alone. These and other data will allow you to get a good profile of the people that buy your products. You can do much more for the customers when you take time to find out more about them.

It is suggested that you take the following steps to collect data on your customers. While at the next craft show, write down as much information as you can about your prospective customers. Now based on your observation, you should be able to get a good profile of the customers who buy your products. You can use the profile to create many products and sell them as a package deal to your targeted customer market. It is easy to target a particular market and find more customers if you use your collected customer profile. Also, a company’s customer profile can be used to provide helpful information when purchasing lead sheets so that you can get more sales. Most companies that sell lead sheets categorize and list people by name, address, age, income, zip code, and other data.

Take time to think about all the different products that could be sold to each market. Make a list of all the products you can produce and sell to each group in that market. This will help to identify and target your market. Once you have identified who the customers are, the next step is to find out what they want. There are many ways to determine what the customers want. Once you determine what your customers want it is easy to produce new products because you are fulfilling a need in their lives. Three ways to determine how you can get your customers what they want are to listen, talk and agree with them.

The customer is still considered as the king and should be treated like one. Remember that old saying . . . “The customer is always right.” So, greeting him properly is a way to build the relationship before selling him the product. Relationship building is one of the secrets to keeping good satisfied customers.