The Three Elements Of Sunk Costs You Need To Review For Better Business Decisions.

We’ve all done it, invested so deeply into something that we didn’t walk away even when all the signs were there. Instead, we dwelled on everything we sank into that business, job, relationship, home, health, finances, etc. and kept on truckin’ as if everything was fine. The problem with sunk costs is that once we’ve accepted them in one aspect of our life, they can easily slip into others. And the really annoying part is that when we’re finally able to view those situations in hindsight, we almost always wish we’d taken action sooner.
Sunk costs can often be divided into 3 general categories:

Time:  We’ve sunk an enormous amount of our time into something—time we’re never going to get back.

Energy:  It’s very hard to walk away from people, things, and situations we’ve sunk our honest and sincere energy and effort into.

Money:  Too many people cross over financial boundaries by sinking money that should have never been used as capital into their ventures.

The reality is that anytime we invest our time, energy, and/or money into one or more aspects of our life, failure is a risk. If you find yourself in a situation where you’ve been investing your time, energy, and/or money, but there aren’t any signs of your investment paying off in the near future, maybe it’s time to take a serious look at why you’re still plugging away at it.
You have proof it’s going to get better. If this is the case, it’s time to sit down and make sure you’re not trying to avoid reality. Believing in what you’re doing is important, but you still need to do a reality check every now and again to make sure you’re focusing your efforts and resources appropriately. Dale Carnegie has a few good thoughts about this:

·       What is the worst that can possibly happen?

·       Prepare to accept the worst.

·       Try to improve on the worst.

Planning for the worst may sound negative, but it’s a reminder that having a cut-off point, or an exit strategy, is always a good idea. Knowing how and when to get out can definitely reduce the stress of getting in.
Hoping things are going to get better.  Hope can be a funny emotion. We use it to stay positive, but it’s also evidence of doubts or fears, or that we’re struggling with clarity. If hope is keeping you from acknowledging the extent of your sunk costs, find someone you respect and have a conversation. Having an objective set of eyes on the situation can definitely be eye opening.
We’d rather fail than be found out. Sometimes we don’t walk away when we should because we don’t want our failures to be exposed. Here’s the thing: Everybody fails, and that means you’re going to fail sometimes too. Suck it up. Give yourself an appropriate amount of time to feel like crap, and then get over it. When you do, there will come a morning when you’ll wake up feeling refreshed and ready to move on.

Here’s the best tip of all for avoiding sunk costs. Before you enter into a sale, investment, job, or some other business arrangement, think hard about what you’re about to invest in. Put some time and effort into examining the true ramifications of your decision. Do your due diligence. It’s your best friend because every business situation comes with some degree of risk. The better job you do up front of proactively identifying and addressing those risks, the less likely you are to find yourself sinking under their weight.

Alan Luoma: I am a Sales Coach with extensive experience in industrial sales, sales management, new

product development, sales and product training. I work with a great national sustainable packaging company and their exceptional distributors to increase sales. My success has been and is in utilizing the Pareto 80/20 principal in business and life. I have become an expert in seeking out and eliminating behaviors that prevent business people from being successful. I am a member of The National Speakers Association and New England Speakers Association. You can view my profile on LinkedIn, or contact me at Luoma@snet.net 

Warning: Ignoring Your Gut Feelings Could Ruin Your Life!

During a recent conversation with my daughter, she told me about a friend of hers who cancelled her wedding just shy of 3 weeks before it was supposed to take place. Drama and lost deposits aside, her decision to cancel impressed me. It had all come down to her deciding not to ignore her gut feelings. Something about the relationship just hadn’t felt right.

Early on in my sales career I accepted a job my gut tried me to warn me about. "Don't do it! There are red flags all over the place!” I didn’t listen. Instead, I ignored my own inner intuition in favor of the logical parts of my brain where all the reasons justifying why I should take the job resided. Needless to say, it wasn’t too long after I started the job that I realized I should have listened to what my gut – instincts, intuition, or whatever you want to call it – had been trying to tell me.

We have gut reactions for a reason. When we get them, our job is to take some time to consider what our gut reaction is trying to get us to pay attention to. Granted, there are times in life when you will make choices that go against your gut. There’s nothing wrong with that, as long as you take the time to try and figure out what and/or why you’re reacting. Below are a few insights meant to remind you of how truly valuable your own internal guidance can be.

Everyone has gut reactions, but they tend to pop up when we’re facing a decision. Our gut could be saying “Yes!” or “No!” because we have gut feelings in both directions. Either way, this reaction to a situation is reason enough to consider what it is that does or doesn’t feel right. If you can identify the cause/source of your reaction, you’ll be in a much better position to make a better decision.

Ignore your gut reactions at your own risk. Your gut instincts, feelings, reactions, and intuitions have one goal – to keep you safe and happy. The problem is that all your gut can do is let you know when your safety and/or happiness might be affected. Your gut can’t tell you what to do. That’s why it pays dividends to pay attention to what it’s trying to tell you. When you do, again, you’re more likely to make better decisions about how to proceed.

Your gut will remind you what’s important to you—even when you aren’t sure what’s important to you. Do you find yourself getting stuck in the same situations over and over again? I’m willing to bet your gut instincts have been working overtime trying to get your attention each time the same less-than-ideal situation comes around. From now on, if you begin to recognize a pattern that isn’t doing you any favors, stop! Is it possible your gut has been trying to inspire you to make a different decision all along?

Most successful people think of their gut instincts and intuition as a gift, and have learned to pay attention to them. That doesn’t mean they make their decisions based solely on those feelings. They use them as an invitation to look deeper into a situation and make sure that the course of action they choose is more likely to be beneficial, meaningful, and possibly even more profitable for them in the long-run.

What have your gut instincts and reactions been trying to tell you lately?

Alan Luoma: I am a Sales Coach with extensive experience in industrial sales, sales management, new

product development, sales and product training. I work with a great national sustainable packaging company and their exceptional distributors to increase sales. My success has been and is in utilizing the Pareto 80/20 principal in business and life. I have become an expert in seeking out and eliminating behaviors that prevent business people from being successful. I am a member of The National Speakers Association and New England Speakers Association. You can view my profile on LinkedIn, or contact me at Luoma@snet.net 

Everyone's In Sales

For this past Thanksgiving, I decide to let my adventurous chef out, and roast a turkey. 

I had been hearing great things about how a roasting rack (that fits in a roasting pan) does wonders for cooking, so I decided to go and buy one.   After a little bigt of research (that is, talking to my friend the ex-professional chef), I discovered that the All-Clad brand was the way to go.

I checked it out on Amazon, and saw it listed for $24 + shipping.   I then had the thought "I ought to support my local retailer, if they have the same product in stock at a similar price."

I called our local cooking supply store, and they had the item--$25, but no shipping.   What the heck, let's go brick and mortar shopping.

When I went into the store, I went right up to the counter, and said to the cashier, "Hi.  I'm here to purchase an All-Clad roasting rack.  Can you tell me where that would be?"

A slow look of confusion washed across her face, and then she painfully raised a hand to point a finger in the general vague direction of the back of the store. 

"It should be over back there."

I decided to give her the benefit of the doubt, and assume that given her vagueness, these must be very easy to find.

I walked to the back of the store.  Nothing.  No oven racks--all clad or any kind.

I came back up to the counter.

"Can't find it."

She lobbed out the phrase "You should check online."

"Online!"  I thought. "The whole reason I came in here was to support you guys.  And you don't care whether I buy this here or not?!"

Instead of yelling, I said, "Can I speak to the manager?"

The manager was quite approachable and friendly.  As soon as I mentioned the All-Clad rack, he perked up even more, and escorted me to the aisle in the back, where, lo and behold, one was actually in stock.

As I walked up to the front, I thanked him for his help, and also shared with him the challenges I'd had in the store up to this point.

Now it was his turn not to get it.   There was no sense of acknowledgement to me, that I was actually offering some customer feedback to help him and his operation.  Whether he felt embarrased or not, he now wanted nothing more than to send me on my way.

When most customers jump ship, at last report, they say their old service provider was "Okay."  Take feedback to heart.  Most people don't bother offering it.

Many of these same people who say "things are OK"  then turn away and never return.
And, as you know, it's a whole lot easier to keep an existing customer than to get a new one.

Everyone who touches that customer is in sales.   Make sure they know it, and more importantly, act it.

Is This Your First Sales Rodeo?

You finally have a meeting set up with the principles of a company you’ve been trying to get in front of for a long time. This isn’t your first rodeo, so you’ve prepared well. You’ve done your homework and have every expectation of a flawless presentation that goes off without a hitch.

It all sounds so easy except for the fact that when you’re potential clients or customers walk into your meeting, they’ll be working off their agenda—not yours. Because you’ve done your homework, you’ll be prepared to answer most of their questions and concerns, but don’t be surprised if they identify issues and ask questions that will make another meeting necessary. They might provide you with a new piece of information that makes the numbers you slaved over impossible to rework on the spot. Or, you might find out that there aren’t any decision makers sitting in on this meeting.

However the situation arises, it’s the way you handle the need for a follow-up meeting that can make the difference between the deal continuing to move forward, or dropping dead right at your feet. The rooky mistake is a response something like this, “Okay… I understated you need this information before we can move forward, but I don’t have it right now. I’ll work on it, and give you a call sometime next week so we can set up another meeting.”

Sometime next week?! Really?

It’s normal to be uncomfortable—maybe even annoyed—when a meeting doesn’t go as smoothly as you had hoped and planned for, but what’s your potential client supposed do between now and when you decide you’re over it and ready to talk with them again? Sit by the phone with bated breath waiting for you to call? It doesn’t matter why you need a follow-up meeting. If it’s due to something you did or didn’t do, take responsibility for it. If it’s the result of something the client did or didn’t do, be mindful and respectful of the fact that everybody is under a lot of business pressure these days.

Step up and take the initiative to schedule the date and time for another meeting before you leave this meeting. If you don’t, you’re counting on a lot of things not to happen between now and then—things like your competition reaching out to your potential client and securing a meeting while you’re still trying to decide if you’re ready to make the call.

Alan luoma is a Sales Coach and Speaker with extensive experience in industrial sales, sales management, marketing and product training. He holds key accounts with a national sustainable packaging company, is an expert that speaks and provides sales coaching to individuals and groups. He is a member of the Hartford Springfield Speakers Network and The National Speakers Association. You can view his profile on  LinkedIn, or contact him at luoma@snet.net

Protecting Your Sales Assets

I always get a kick out of companies who hire sales people with “experience", hand them a product book with pricing, and tell them to go out and secure new business. Sure, they save money on product and sales training in the short run, but they might lose potentially great salespeople too. As a salesperson, you can hope your sales manager knows what they're doing, or you can take matters into your own hands by building and protecting your own sales assets.

Protect Your First Impression by Knowing Everything about Your Product: When you stand in front of a prospect or customer and they know more about your business than you do, it’s time to go home. Whether it’s insurance, gasoline, machines or anything else, make sure you know what you're selling and that you're able to explain it simply and concisely. If you can't, your dog will happier to see you than the prospect or customer you're about to impress with how much you don’t know.

Very few business owners make their purchases based on an “I have to have it no matter what it costs” attitude. If they did, sales would be a simple game of who gets to the decision maker first. That’s not the case. Businesses flourish as the result of good fiscal management. If you want to flourish, you need to have a good explanation as to why someone should spend their money with you.

Protect Your Sales Pitch with Solid Economic Justifications: When it comes to a serious purchase where good value and a workable price are important, the very best tool a salesperson can use is the economic justification summary. Presented correctly and professionally, it will secure the order more often than not. It’s also an excellent tool to use to determine where to spend your time. Do your research so you'll know if your product or service makes economic sense for a potential client. If it doesn't, don't waste their time, or yours.  

I've seen many salespeople fail simply because they didn't plan their days, weeks, and years. In sales, if you're not producing the revenue expected of you, you're likely to become an expense your company decides they can't afford. It’s true you won't always have control over getting someone to sign on the dotted line, but you have absolute control over increasing your odds of making it happen simply by preparing yourself for success.

Protect Your Career with a Plan: It’s simple and straight forward: Plan—follow up, then plan—follow up, etc. If you do this, then you have a very good idea of where your money is coming from. Do you know which accounts are a definite? Do you know which prospects are ready to do business with you? Do you regularly review where you are and what you have to do to correct any potential shortfall? Are you concentrating on revenue? Or are you wasting your energy on activities that have nothing to do with increased revenue?

When you take the time to regularly review your sales assets, you are protecting them by making sure they are all in tip-top shape. It’s a solid investment towards your continued success.

Alan Luoma is a Sales Coach and Speaker with extensive experience in industrial sales, sales management, and sales and product training. He holds key accounts with a national sustainable packaging company, is a motivational speaker, and provides sales training to individuals and groups. He is a member of the Hartford Springfield Speakers Network. You can view his profile on LinkedIn, or contact him at Luoma@snet.

Necessity IS the Mother of Invention

Yesterday was Mother’s Day. Each one of us is in this world is here because of our birth mother.
And we thanked our moms with a card, flowers or a celebration. Perhaps we have spent our growing life with our mother or maybe we have been adopted and have a second mother. Perhaps we have a step mother or we might have had a surrogate birth mother. I have a step-daughter who was a surrogate mother, carrying and giving birth to twins that were the sperm and eggs from their own father and mother. 

Wow! What a creation! Maybe we are called mother by someone who is very close to us and if
we are very lucky we become a grandmother or even a great grandmother. We also use the word mother in many different forms from Religious to disgust.

Then there is the use of the word as this quote states: “necessity is the mother of invention.”
What this means is that there is a birth of an idea that has a solution.

As business owners, Professional Speakers, writers and Marketers we all become mothers to our businesses whether male or female. We create, feed and nurture ides, programs, books, blogs, Speeches, Workshops and various creations.
 

There are usually two kinds of people who are Soleprenaurs. The process person and the product person. If we are a process person we may procrastinate, and put off the product creation, production and distribution because we are just having fun doing what we’re doing. If we are a product person,
we may have difficulty with the process and are quite joyful when we get someone else to help us
as we create the finished product.

It is however, a necessity to be both a process and product person if we are to stay in business.
When your mind wanders too far away from the task at hand and you lose sight of the end results
get some Life Coaching to help you stay motivated. Likewise, if you are focused on the end product, get a Life Coach who can help you with your business process.

So yes! Necessity IS the mother of invention and that’s YOUR challenge!

         Carolyn Finch  carolyn@carolynfinch.com
                                                           Communication LifeStyle Expert
                                                           Conference-Convention-Workshop Speaker
                                                                        Call 203 725 3133 or
                                                                        Text: 203 512 4798