If your B2B small business finds itself on a nice growth curve, you will eventually run up against a very common problem: How to sell successfully to very large companies.
There are some structural and cultural barriers that often prevent small businesses from gaining big businesses as customers and clients. For one, small businesses are typically younger businesses with no guarantee that they’ll be around tomorrow…or at least that’s the way big business management often sees it.
Making your business look bigger
When you’re just starting out you can make your team look bigger by signing up with a VoIP phone system provider and establishing a series of “extensions” that give the impression of going to various departments…even though all calls end up on either you or your partner’s cellphone.
I remember one young entrepreneur relating a story about how he occasionally took over the offices of his father’s established business when he had to meet with important visitors from large companies. He even had signage made up that fit over his father’s signage.
While these kinds of tricks are more appropriate for startups, there are similar problems you’ll face when you get to the place where you feel that you should have a legitimate shot at landing a big business client.
Understanding the approval process
If you’re in that position or nearing it, here are two critical pieces of information:
- Leadership at the company’s various levels will have dollar amounts they can spend without the approval of their superiors.
- If approvals from others are required, it can greatly slow down the purchase process, which can severely impact a small business.
With these facts in mind, be sure that you know how large of a purchase the person you’re working with can approve without having to jump through additional internal hoops. With this knowledge, you can present a bid or a proposal that is within a range to get quick approval.
When you misplay pricing
What often happens to small business owners is that they feel they’re about to land a huge contract with a big business. They get very excited by the financial potential of the new relationship and start to put the people and infrastructure in place to make good on the contract.
But when the approval process starts to grind its way through the big business’s bureaucracy, weeks and months may go by without any revenue coming in on the new contract. This, of course, can cause a huge cash flow problem and even threaten the small business’s viability.
Be sure you’re not biting something off that you aren’t big enough to chew. When your proposals are properly tailored for quick approvals, you get the money flowing and you establish your credibility with the company. Then, when it’s time to submit proposals that require additional approvals, your company will have a solid reputation and you will have established a better cash flow.