The #1 Reason Small Businesses Fail - And How to Avoid it
This is a May 2, 2019 conversational podcast episode (Episode 3) hosted by Jesse Ferrell and Shondell Newsom discussing why small businesses fail and how to avoid it. They identify cash flow as the top reason, cite common failure causes (lack of capital, poor management, inadequate planning, overspending on marketing) and specific stats (42% fail due to no market need; ~99.7% of U.S. businesses are small). The hosts stress defining a niche/avatar client, building a signature brand tied to one’s gifts, using emotional marketing and customer experience to attract/retain customers, and preparing operationally (systems, discipline). They use anecdotes (casino/local-market example, Jesse’s departure gifts, a credit-card processor failure) and case studies (Kodak’s denial of digital photography) to illustrate market attention, adversity, and productizing services (online courses, "Breakthrough Success Plan" and Shondell’s "12 Steps of Marketing").
Questions this video answers
May 2, 2019 — Episode 3
Cash flow
42%
99.7%
2012
Chapters
Foreign. Conversation podcast powered by Jesse and Shondell.
Shondell, you are from that side, do or die Brooklyn. That little town.
That's a little town that's nothing like Hawthorne, Nevada. Population 5,000 cats and dogs. Welcome to our Conversations podcast. This is powered by Jesse and Shondale Newsom. There it is. This is May 2, 2019, episode three and our title, Shondell, which is a really good one for everybody, definitely for us.
Oh, yeah.
Is it's going to be the number one reason small businesses fall or no, sorry. The number one reason why small businesses fail and how to avoid. And they do fall. We're going to talk about, number one, why they want to talk about the number one reason and we're going to talk about other reasons why business fail, not just the number one.
Yeah.
And then we're going to also talk about how to avoid it. So what's cool is next week is national Small Business Week. Yeah. So this is a great topic right now. This is those of you that are out there listening, whether you're in small business or not or even if you're in big business, it doesn't matter even if you're not in business because typically someone that you're related to is in business. And so it's all going to apply. Yep. So I like to go organic with you. In fact, let me.
And I'm starting to watch party, so a lot of people are going to join in.
Okay, good.
So you got to make sure. Let me turn it down.
You got the watch party going on over there.
Watch party going so that my viewers can check us out and see what's going on. So I got a few people that are already sent. Aunt Cynthia, James Edmond.
Nice.
And let's see Maria. I think it's Maru Gonzalez Garcia. Everybody's joined, so that's good.
Well, you know, and every now. And let's tap in to see who else is there. If you want to see something with them or whatever. I highly encourage that. I think, you know, Shonda, a good place for us to start. It was. Is with a little bit of statistical stuff. Then we're gonna go organic like we always do. We'll bounce back and forth. So this is again, the number one reason businesses fail is a two four letter words.
Okay.
Cash flow.
Okay.
This is the number one reason business fail is cash flow. Two four letter words. Then it says, according to Investopedia, the four most common reasons why small businesses fail are lack of sufficient capital, poor management, inadequate business planning, and overblowing their marketing budgets. Cash flow problems. 42% of small businesses fail because there's no market needed.
Let's talk about what cash flow is. Right. And what's interesting is when you ask an accountant, they think it's about how the cash is managed throughout the business and things like that. Me, as a person who has been in business for over a decade, I will tell you that one of the challenges, one of the biggest challenges I see with small businesses is the fact that one, they don't know how to attract customers. They don't know how to keep old customers or retain current customers.
When you say track customers, what do you mean by they don't know how to track or attract. Okay, good. Okay, good.
Got it. They don't know how to attract new customers because they don't know who they want to attract.
They haven't, they haven't made a specific target and said, this is my. You know what? Funny you should say that. Should say that. Let me tell you about that issue. That's good that you bring that up because check this out. Yeah. For many, many years. And I think this, I think a lot of people listening to this and maybe not you, or maybe you may have found themselves in the same predicament. Yeah. I think a lot of times we try to be too much to too many in an effort to still be in business. I made a mistake myself for many, many years. Do you know, it is just this year that we are now, we have now chosen our avatar client and we are going for a specific target range.
Right.
I think too many years I tried to be too much for too many. And I did that. What I felt it was like. Sure, because the more I could do, the more I could serve. No, no, it's the. Actually the opposite to your point. You know what?
Because you're feeling like you're going to miss something. If I'm not available to everyone, I miss something.
Correct.
What's important for people to understand is that for example, when I worked at station casinos and you know me, you and I both talk about our hospitality and gaming.
Love. It is.
Right. The thing that I loved is we were focused on locals. We were focused on a market. Right. Focused on a niche. Right. And I never forget that there was a casino host that came to work for me and he wanted to bring all of his star heavy hitter.
Like because they were big money.
Yeah, because they were big money.
Right.
And he was saying, well, just imagine one Charles Barkley will make up for thousands of local customers. I said, but the problem is, is that's a one hit. These thousands of customers are three times a week. Totally different market, totally different attitude. The more you focus on your customer or your niche. Your niche. Right. You.
We have got to establish our niche. And then you need to do what you need to become in the top 5% in terms of your acumen and your strategies and your style and your delivery and your service in that niche.
Yes.
Stop trying to be too much for everybody. Go back to your Charles Barkley example. In fact, I actually met him and I spent some time with him too.
You know, Charles Barkley is a big. You know, he's a big gambler. But for him to come to a local casino, one is gonna, you're gonna. It's gonna take a lot for you to get him there where you already have these. If you want to compare them to a hundred local customers, those folks already there.
Well, he may likely come there if the. If your relationship with him is strong enough, you can get him to come. But that doesn't mean that's his place. Charles Barkley really likely deserves at a Caesars Entertainment at an MGM Resorts International because it's a bigger profile. They got bigger platforms and they're. And there are more people like him in those places. And let's just go back to this. As human beings, in order to lower our stress levels, what we're functioning by is survival. What is survival? Survival is eat to survive, avoid eating by the predator, get a job, build a business, whatever. And sex for procreation. The thing that lowers our stress more than anything else is that we are herd animals. Flocks of geese, schools of fish, religious communities, ethnic communities. So when we are in our community, it lowers our stress that dopamine, serotonin gets balanced out. So Charles Barkley is much better in his element at Caesars or MGM Resorts International than he is at Palace Station.
Right.
Nothing wrong with Palace Station. Exactly. There's nothing wrong with it.
Right.
But to your point, when you guys focused on locals, what you've built is an infrastructure that serves locals. You don't have all the high profile restaurants there.
Exactly.
You don't have all the five or six big name shows in one place. Yeah, right. You give it.
You're giving them what they want.
Exactly.
You're focused so much on the niche that you are giving them exactly what they're asking for.
Absolutely.
You're not, you're not. You don't have to create. And guess what? After over a period of time, it becomes habit. It does walk in. And those folks are there because it has become habit.
And that habit is what brings. Lowers their stress levels, raises their entertainment value. And quite frankly, Charles Barclay, even if you, Even if you have a relationship with him and you can get him there, he's likely not going to stay there, keep coming, because it's like. It's like it doesn't really fit.
Doesn't fit. And that's not it. That's not his place.
And that's the point when you talk about attracting customers. So how should people that are in business, regardless of the name of their business or what their business is, how should they be attracting new eyeballs?
Tell me, first and foremost, they have to understand what they provide. What value do you provide? Because value is in the eye of the beholder. And I always use a scripture is Philippians 2, 3 and 4 is do nothing out of selfish ambition or vain conceit. Put others above yourself. So that is how you attract the customer.
Put others above yourself. Is that anything like how you leave them feeling?
Oh, yeah.
And treat others how they want to be treated, not how you want to be treated. There's some parallels there.
Okay, parallels, perfectly. Because what people want to do is. It goes back to what we always say, people want to feel good.
They do.
There's no. Don't, don't get, don't get caught up in the hype of. In marketing, people get hyped. Get hyped up about the imagery and all of that.
Right?
Imagery only works if somebody has an emotion about it.
That's right. Because. That's right.
It is all about. And that's how. That's how we met. Because I saw your book and I saw what you were talking about. Understand that when I, when I say, when I talk about the 12 steps of marketing, right. I am talking about you getting an emotion from a person. And emotions last longer.
Absolutely.
Anything else?
They're more sustainable. They're more sustainable and they leave a bigger mark.
Yes.
Because it's almost like the quote, and Maya Angelo gets credit for the quote. But people may not always remember what you've done, but they'll always remember how you left them feeling or how you. She says how you made them feel.
How you made them feel.
And so it's what is. It's how you make them feel is what they retain to your point. Emotion.
Right.
Not what you've done for them.
Because what is sports, right? When you go to a game and somebody hits a historic home run, you remember where you were at that time because of the emotion. It was like the elation the feeling.
And it'll come all back to you, just like it happened yesterday.
Exactly.
Interesting you said that. Because when I was in corporate America, when I was leaving corporate America, this concept that you're saying, I didn't know how on track I was with the contract. We're going to get back to attracting customers, too. But that can be a bit of a competitive industry, and it's a monkey see, monkey do industry. And there's a lot of jealousy and insecurity in the industry. And what I did not want was for all those people that I worked with for all those years to harbor jealousy or envy because I got in their perspective, I got out.
Right, Right.
Okay. So I thought, what can I do? And I thought, you know what? First thing is, I don't want anybody to know that I'm leaving until I'm gone. So I asked the president, at the time of the Rio, it was Gary Celestner.
Yes.
He's over at Caesar's now. He's the president of Caesars now. I asked him to please not tell anybody that I'm leaving until after I'm gone, because I want to work all the way up to that point. But then I bought this little at the time, karaoke was big at the time. So I bought this karaoke machine, cost about 3, 400 bucks back in the day. That's almost 20 years ago.
Right.
And I bought this at the time, PDAs were popular at the time. So I got this handheld PDA. They were about 400 bucks, too. Four or five hundred bucks. Yeah, yeah, yeah, exactly. I bought those two items. And at the next marketing meeting, because I was a marketing executive, I gave those to my vice president, marketing, and I gave him enough raffle tickets for everybody in the room.
Right.
I said, at the end of the meeting, I want you to raffle this off to my team that I'm leaving. And I want you to tell them that I appreciate them allowing me to have the opportunity to work with them.
Right, Right.
Think about that. Why did I do that?
Well, I mean, because you knew that by showing appreciation, people will never forget. And you'll make them feel feel special. Right. And you, you more so you'll make them feel appreciated.
And I really meant it. And so now when I come back into the Rio, I don't want any crap.
Right.
Because I'm not no longer one of you.
Oh, no. Yeah.
And I registered as an independent agent, so I would have to come back at times, because even though I wasn't working inside and I Was working on building this business. The just talk speaking and coaching firm business. I still had a leg in. So I did not want to be disenfranchised because of resentment.
Right.
So my point is back to you is that emotion that I was striking with him was sincere, and I really did. I wanted to do something I was really sincere about. And you know what? I was always welcomed by every one of those guys whenever I came back on property.
Yeah. Because, you know, you. It's all about how you made them feel. And you made them feel special. You made them feel appreciated.
People.
Don't forget how you make them feel.
No. And guess what? I'm leaving. That's my. I'm walking out the door. I'm not coming back.
Right.
Do something.
But you know what happens with small business owners. And, you know, I know national small Business week is next week, and if I could give any advice to small business owners is get over yourself. Right.
Oh, I say that all the time.
That was a great selfless.
I say that all the time. Get over yourself.
Get over yourself. And if you want to attract customers, make it all about them.
Yeah. You know, so cool about you, get over yourself concept that you just said. We, Lisa and I are certified in color code. Color code is a personality assessment. And real quickly, we overlay the game of baseball, which is because you're a great athlete. You get this. We take the game of baseball. We use that analogy to overlay in terms of the concept of color code.
Right.
When you take the color code, you're in the game.
Yeah.
And the whole point in the game of baseball is to do. Score what?
Score runs.
How do you win the game?
Right.
How do you win the game? Yeah.
You score runs. You got to score more runs than it.
You got to score more runs than the other team. Yeah. So. So when you take the code, you get your assessment and gives you your strengths, your limitations, your wants, and your needs.
Right.
Okay. And it lets you.
This is also psychographics.
Exactly. Well said.
Yeah.
But in order to win the game, you got to get on base. So in color code, it says getting to first base. That's you getting yourself. You got to get. Who. Who is Shondell?
Right.
What are your wants, your needs? What are your strengths, your limitations? What's holding you back in terms of your communication style and all that? That's getting the first base to get the second base, you got to do something about those limitations to get rid of them. Right. Raise those strengths to get the third base. It's exactly what you said get over yourself.
Right.
Getting the third base is getting over yourself. And realize it's not all about you learn to speak the language of others. That's getting over yourself. Now, when you score, who you scoring for? When you score, when you cross home play, who are you scoring for?
Yeah, you're scoring for others.
You're scoring for others. Going for the team.
Yeah, for the team.
So guess what? That's proven. You get over yourself. And that's how you win. Yeah. Come on.
Yeah. And that's what I think. That's the small businesses. Because what does it say here? It says 42% of small businesses fail because there's no market need for their service or products. What's interesting is I wouldn't say there's no market need all of the time. I would say that they haven't identified.
Right.
The right market because they have not gotten over themselves.
Can tell you something that's gonna shock you. I totally agree with you. Guess what? It's not on our stats, on our paper, but I read it somewhere. Yeah. When we were Preparing for this. 99.7% of businesses in the US are small businesses. Did you know that?
Yeah, I knew that.
I didn't. That blew me away. 99.7. So if they haven't gotten over themselves, they're destined for what?
Failure.
Thank you.
Absolutely. No doubt about it. Because you have to understand that a small business was designed. Small businesses were designed to serve people.
That's right.
That's. That's the basic premise.
I'm so glad you said that. All businesses are signed. Lisa's got a note for us here. Let's see. Okay. Thank you.
You're too far away. You can't hear you. Come on in.
I feel like we're screaming. Yeah. Okay. Lisa says I gotta get closer to the mic. You gotta.
You gotta.
Man.
Mic, brother.
Man. I was feeling it from back here, too. Okay, so Derek who? Oh, Derrick Elliott. Lisa. Lisa is in the back. She's got some other things doing on special. Silence.
She's on it.
But she's just. She just mentioned that Derek Elliott is on the line. Derek Elliott. Let's. We'll get back to that point because you. You raised some really good points. Where were we at before I get on to Derek Elliott?
Well, we were talking about the failure of small businesses. So go.
But you were saying something about why they fail because they don't get over themselves.
Yeah, they don't get over themselves. And like you said, you. The 97 point or 99.7% are small.
Businesses, which boom that I didn't know the number was that big. That's a big.
Small businesses are the largest employers in the U.S. exactly.
So we're talking about, we're talking about being able to get over yourself and making sure it's not all about you.
Right.
I don't want to lose that thought. But Derek Elliot, he actually, when I left corporate America, oddly enough, he was, he was the first person that I showed back then when websites were a big deal before five year olds could build their own website back in the day. Yeah. And he became, he said I'm gonna become your largest customer because of what he saw in that one page. And he became our largest customer for many years. Derek Elliott's out of Canada. Out of the eastern port of Canada.
Toronto.
No. You could fly into Toronto, Orangeville almost. I haven't said that in so long. Orangeville, Canada is where it's from. Which is about an hour from Toronto.
Oh yeah, I know where it is.
Exactly.
So I spent a lot of time in Vermont. So Derby Line is right on the border of Canada.
Yeah. And superb customer. Got to serve him, the president. He was the president at the time, the founding father. Got to serve all his executives and got to go to the Dominican Republic.
Nice.
Where they had resorts and served the resorts, blah blah, blah sort of stuff. But yeah, but, but getting back to numbers. So thank you Derek Elliott, for tuning in because this is cool. So getting back to the part about we're on a flow about it's not all about you.
Right.
And you've got to get over yourself to be able to serve. And, and the number one people think when you ask people why they're in business, shondell most people when you ask them not shondell try to step away from your knowledge.
Oh yeah.
When what do you think most people answer, Shonda when you say they're in business to do what? Why are they in business to do what?
I mean I'm in business because I want to be my own boss. That's one business. Because I want independence. I'm in business because I want to make a lot of money.
That the third thing you said is usually the first thing people say, but you said it.
Well, I get them all. And you know, just being, you know, at the urban Chamber a lot. And then also people come and call me for advice when they start their business. The first thing when they say is I'm in business to make money.
Yeah.
Tell them please make sure that that's not the reason you're in business.
Because if it's. If you're in business just to make money, you're likely going to fail sooner rather than later.
Yeah.
The number one reason, in my opinion, to be in business, and you said it early, is to serve a client.
Serve, Serve. Yes. And Guy Kawasaki from the Macintosh division of Apple in the early days, he does a lot of public, public speaking. He says, make meaning and then you'll make money. But if you want to make money, you will never make meaning and you will never make money.
You just gave me the chili bumps. Say that one more time. Make meaning.
Make meaning, and then you'll make money.
Okay.
If you set out to make money, you won't make meaning and you won't make money.
Okay, check this out. This past weekend, I spent some time with my baby brother, Tony. I don't get to spend a lot of time with him. Cool. He's been talking about getting his own business for a long time, and he really, really wants to do that.
Yeah.
And when I asked him questions about it, I said, because he's talking about maybe in the tenant, he wanted to. Maybe talking about jeans and maybe T shirts or whatever. Nothing wrong with it. Although the market is definitely flooded with that. Nothing wrong with that. I said to him, I said, what is your signature brand?
Yeah.
He said, right. I said, what's your signature brand?
Right.
He said, well, what is that? So I helped him understand what a signature brand is. And I said, now do you know what it is? He says, no, I don't.
Right.
I said, you want to establish your signature brand first.
Right.
I said, what are your best gifts and talents?
Right.
He said, I'm not really sure. Wow. I said, okay. Do not lose your energy on wanting to own or start your own business. Nothing wrong with that. I said, but put it in a.
Let me grab Junior.
I said, put it in the pocket over here. And I said, this. Still pursue that. I said, but first establish what your best strengths and talents are.
Right.
And your best gifts and talents, preferably your calling and your purpose.
Yep.
Yep. Then determine what is your signature brand? What do you stand for? What do you want to stand for? Check this out. You know why, Shondale? Because if you know what your best strengths and talents are or best gifts and talents, and if you know what your signature brand is, when you go into something, sell into a business to infuse that into the business.
Yes.
When it gets tough, what do you typically do? If that's your signature brand and that's your calling, your gift what do you do?
Yeah, you fall right back to it.
Yeah. You dig in. Even dig in. But if you're just selling a product to sell a product and things get tough, what do people do?
No feelings. And, you know, it still goes back to how you make them feel.
It does.
So when you gave me this is the book that I broke for the 12 steps of marketing.
Right. Oh, nice. The 12 steps of marketing. Perfect guide to Branding. Oh, there we go.
So what you're talking about to your brothers, the first thing you have to understand is your own DNA.
Nice.
You have to know.
Nice.
What are you good at? What are you great at? What do you do organically and naturally to serve other people?
Nice.
What do you do naturally? Right. Jess, we. From day one, when we talked, you talked about. Hey, you talked about how you serve and help people through coaching.
Yeah.
Guess what, Jess? You're good at it and you enjoy it.
I love it. You know what? Listen. It comes from such an innate place. It's a power that's beyond me. I do love it. And check this out, by the way. I want to keep getting better at it. I still want to keep getting better at it.
That's my point. The greatest athletes in the world, the Magic Johnsons, the Michael Jordans, they wanted to always go to a different level.
I want to be in a different level.
They wanted to be there. See, the problem that we face, Those. Those percentage. Those 42% of small businesses that fail, most of those people don't have that.
Because they're not connected to that. They got in the business for other reasons. Right.
They got into business because it looked nice and they got into business.
It sounded attractive.
Sounded attractive.
Or they knew someone.
Yes.
That was in and it was good for them.
Yeah.
Oh, then I'm going to do that.
And guess what, Jess, I'm teaching a class and, you know, I told you, at least I'm teaching a class every Wednesday night for the next. Now we're down to.
Let's see.
We're week eight yesterday, and it's called next level for entrepreneurs in this business. And we're talking to those folks. The big thing that they're learning is they are learning that they were not as prepared as they should have been.
As. Right.
And they're telling me that they're like, wow, Shondell, you're opening. You're opening so many doors. You're. You're opening my mind. And as a matter of fact, you're a guest speaker coming up soon.
Yes.
You're going to be Speaking to that class.
Yes.
These folks come in wide eyed and bushy tailed. They think I'm going to give them a secret sauce.
Yes.
I'm walking them through the grind. Right.
That is the secret sauce.
I'm bringing in guest speakers like you who can speak real to them.
Yeah. And if you want. And if you want to grow through it, you've got to go through. Yes, sir.
Yes, sir.
If you want to grow through, you got to go through. If you don't go through it. Like I was talking with my baby brother. Yeah. If he doesn't go through it, he will not grow through it.
Yes, yes.
You've got to go through it. And you got to start at the basic foundational level. You got to.
You got to know that adversity is inevitable.
Absolutely. Guess what? Every day.
Every single day.
Oh my God. Let me flip. I'm going to come back to your book in a sec. You said verse. I got chili bumped when you said that. We've been with our credit card processing company. I'm going to rough it out roughly for about 10 or 11, maybe 12 years. And we just switched because the feed's got to be ridiculous. And the new company, you talk about adversity. I was so excited about this new company and the new company. I heard a little switch over there, but we're still up with the new company. Yesterday we went to charge credit cards. The first credit card we couldn't charge. We figured out we had to call in for support and help and blah blah, blah, blah. They didn't turn on a switch. So we can charge our international clients. It was a Canadian client. That's not on us, that's on you. I already told you what our business is. So you, you know. Anyway, so we missed that. The second one we couldn't charge. We charged it three times. A decline. I felt the card was good.
Yeah.
My intuition said this card is good. Something's wrong here. So we backed off. And when we got a couple charges in, we went back charged again. It didn't charge. Right. I reach out to the customer. Now, you already said it.
Did.
You never said that I was a bill collector, did you?
Right.
See, because I'm not.
Right, right, right.
Professional speaker. Life coach. Executive coach.
Yeah.
I'm not in the bill collecting. Don't make me hound my clients for money.
Right, right.
It's not why I'm in it.
Yeah.
And it's embarrassing.
Yeah.
Reach out to her. Client says no. That client. That card's good. Now I'm bothering the client. On their workday. Go back, try to charge it again.
Yeah.
Guess what happened.
Shondell didn't charge.
It didn't charge.
Wow.
Another client, huge client, would not charge.
Wow.
And I spent. Typically, it takes me 20 minutes with our accountant to process credit cards. Four and a half hours time. Didn't you say adversity?
Yeah. Adversity is inevitable.
Come on, Chanel. Yeah.
Yeah.
So then I thought, well, let me go back. I didn't abandon our old system yet, thank God. Put the credit card in charge, no problem. Put the second card in charge, no problem.
Yep.
But now the adversity came. Wasn't wouldn't. When it didn't charge. That wasn't the adversity. Guess what the adversity was.
You had to call your client, talk to them.
That wasn't the inverse. That was challenging. Guess what the adversity was.
What?
The new company that we assigned onto, they don't care that I couldn't charge the car.
Oh, wow.
Yeah.
That sucks. Yeah. So. And that's, you know, that's one of the core values that we have, is caring.
But Shondale, they're my new system. It's my first day.
Right.
This card is live. I don't tell them right away that I could get a charge on the old system, on another system that's not theirs. When I tell them that, guess what he says? Nothing. I had to tell him four times. I said, I need you to acknowledge that you're hearing me tell you that it got charged on another system that's not yours. So there's nothing wrong with my client's card.
Right.
What's wrong with your system?
Right. And they. And they didn't care.
He said, well, you know, if you want, I could think about maybe escalating. What if I want?
Right.
How do. That's why we came to you, because we're frustrated with the old company. That's an adversity thing. That's live. I wanted to share that with you. What do you think about that in terms of adversity?
Well, you know, like. Like you said, it comes down to everything comes back to experience, and it comes back to feeling. Because what most people don't realize, when I talk about branding, when I talk about marketing, I'm talking about the whole process.
Yes.
I'm not just talking about how you communicate, how you show your logos and colors. I'm talking about how you go through that whole. So they. They. You started working with this credit card.
Company, the new one. How'd they leave me feeling?
Very bad. And so four and a half hours.
Out of my day.
Right. So what's your image? Your image of them is inept. Oh, right.
Just.
You just got all bad images about that credit card company.
I even reached out to the guy that sold it to me. He didn't have time for me and didn't call me back.
So there you go. So your image. So your image of that company now is all negative. And that's what I tell people all the time. See? So going back to again, why do small businesses fail because they can't attract or retain.
Thank you, customer. Thank you. And you say here. I just flipped to a page here, page 15. I just flipped to it. It says, sales promotion is the spark that lights the fuse for salespeople to blow up. I'm going to say that again. Sales promotion is the spark that lights the fuse for salespeople to blow up. Now, you know this because you wrote it, but they don't know it. So I want to read just this little paragraph here. The best salesman or saleswoman will tell you that they are the best thing since sliced bread. I hear it all the time. They can sell ice to an Eskimo in the middle of Alaska during the winter. They can sell the devil a heater. But I will tell you that they are only as good as the sales promotion that accompanies the final pitch. Here is the truth about sales. The customer needs some prompting to build up the desire to purchase an item. Let me make it plain to you. A potential buyer may need a car. The salesperson is not going to get the customer to come to the dealership. In fact, when they get to the dealership, the first response is, oh, my God, I have to walk through those sharks. It's so true, right?
Yeah.
Right. So break down that little paragraph where we talk about the sales promotion is the spark that lights the fuse for sales people to blow up. This is from Shondell's book, the 12 Steps of Marketing, A Perfect Guide to Branding.
Yeah, so, you know, I always tell salespeople that in order for them to be great at sales, they have to learn how to market. They have to understand that when the best thing that would happen for them is when a person shows up to a car dealership, they are looking for you, and you know exactly what they need and what they want. Guess what happens? You spend less time trying to sell them, and you spend more time trying to address their need.
Right.
And when you address their need, you get them in a place where they're very comfortable. Quickly.
Absolutely.
Signing documents. They walk out the door happy. And then you can get on to the next customer.
Absolutely. And you're serving.
And you're serving. What I see from most car dealers or people who are car salesmen, they spend too much time trying to convince people as opposed to addressing their needs, you're trying to convince them to buy purchase versus addressing their need. Where 1. When you address their need, they will say to their family and friends, this person looked out for me. Wow. When you sell them something, they're going to think you're a jerk because you're trying to give them something may not necessarily want or need.
That's right. That's right. Well said. So.
So that's why I try to get salespeople to understand how marketing plays. Marketing and sales promotion plays a key role in their success.
It's huge. It's huge. And that whole that who piece about, you know, that emotional piece that you brought up earlier, that's the tie in. But we have to. Don't just reach them emotionally. Reach them emotionally where it matters most to them. If your product is not a good fit for someone, don't try to shove it down their throat. It's not going to last long even if you get the sell.
Right. Right.
It's got to be. It's got to be a fit for both sides. And so funny you should say that. So I want to. There are a couple pieces that I want to read here. Chandel about some of the folks and these, these are. This doesn't. These are not just small business. These are big business. But I. But I want to shuffle this in because I found this very fascinating.
But I think that small businesses have to have the behaviors of big businesses in order to be successful.
Thank you.
But you have to have the behaviors successful.
That's well said. Because if they don't, they're going to fail too. Plus they also want the people that they're serving to feel like they're credible, that they're quality. But here's a business called Kodak. You ever hear of a business called Kodak? I'm just going to read here. I want you to respond from. This is a short paragraph. Let's see. Kodak. Kodak, a technology company that dominated the photographic film market during most of the 20th century. The company blew its chance to lead the digital photography revolution as they were in denial for too long. We're talking about denial here. Steve Sassen, the Kodak engineer, actually invented the first digital camera back in 1975. Take a look at this, but it was, it was filmless photography. So management's reaction was, that's cute, but don't tell anyone about it, says Sassen. The leaders of Kodak failed to see digital photography as a disruptive technology. A former VP of Kodak, Don Strickland says, we developed the world's first consumer digital camera, but we could not get approval to launch or sell it because of fear of the effects on the film market. The management was so focused on the film success that they missed the digital revolution after starting a Kodak filed for bankruptcy in 2012. The Kodak failure surprised many.
You know what happens?
Can you imagine?
Of course, because you're not paying again, you're not paying attention to the market.
You've got to pay attention to the market. I'm getting chills now. So speaking of Kodak and what you just said, Sean Delbal, paying attention to the market. You're expert in this.
Yes.
And just because you're good at some things doesn't mean you're good at all things.
Exactly, exactly.
Do you know this year is the first year we start? Because I used to say, well, I'm not in competition with anybody else, I'm only in competition with myself. That's nice.
Right? Right.
That's nice that I don't see other competitors, but they really are out there. That's a feel good thing. But at the end of the day that means I'm not looking at the market because I'm focused here. That's the wrong focus. So we looked out and I thought, you know what? This online course thing is something that's huge. We need to start designing our own online course stuff. Not to be with everybody else, not just design the course. You know why? It's a 366 billion dollar industry that I've been standing on the sidelines for.
Sure.
And I could further grow the company, further design the company and not become a Kodak.
Right.
By having online products. You know why? Because people are seeking those. I don't need to be in front of audiences all the time to make my mark or to serve.
Right.
And so the breakthrough success plan, it's just. We just finished filming all nine modules. It's just now starting to hit the market. And it's designed, get this, it's something we've been doing all our lives, but now we packaged it. Yeah. It's designed for those, those people that are in either corporate America or in a business and they want to go to the next level. How do they prepare for that?
Well, you know I'm telling you this is that Kodak faced it, but also Apple almost.
Oh, sure did. That's right. Right when they got rid of Jobs. That's right. Yeah.
Job was talking about the Mac.
Yeah.
And they did the same thing. They almost.
They were this close to being out of business.
Yeah, they were that close.
You're absolutely right.
And so that's why, you know, when you talk about, like evolving and moving with technology, that's what my daughter did a few years ago. She created the. Some new solution zone. And that's an online platform where she took the 12 steps of marketing.
Okay.
And she put it in digital. And I mean, I'm digital on online.
Okay.
So that people can now engage with me online.
Right.
And what's interesting.
Which, which, which they get to gauge with you online when it's right for them.
Right.
Not just when it's right for Chandelle Newsom.
Right.
The online course, the breakthrough success plan, allows them to go at their own pace and they can engage. Plus there's a weekly component that we created, a strategy call for everybody that has bought that program can be online once a week, connecting with the experts and so forth. But they can. They can be online or they don't have to. They can do when they want to, not just when we want to. They can do it when it's right for them, not when it's just right for us. Yeah.
A few years ago, that's what my daughter said. She said you've done many classes in the classroom, you've done radio, you've done workshops, you've flown other cities. You've helped a lot of people through the 12 steps of marketing. She said, but let me put you online so that you can.
Brilliant.
Do the same thing. People can connect on their pace.
Right.
Whenever they need to.
I, I've.
I Filmed all modules 2 couple of years ago.
Okay.
It's online. Everybody can go at their own pace. That's huge, right?
Yeah, it's a much better offering. You are receiving. Responding to the time versus reacting when it's too late. Exactly. What's the difference between reacting and responding in your mind?
Well, reacting is, you know, reacting and responding. So reacting is when you're late to the party.
Yes. Responding is.
You're right on time and you're addressing the need when it's, when it, when it's at its peak.
Yes. You've got. Yes.
So you've got a perfect synergy of things going.
Exactly.
Yeah.
A lot.
And it's tough, I got to admit, it's tough for small businesses. That's why I always encourage them to reach out to other shondell.
It's tough for all businesses. Yeah. Look at mgm. Look at MGM Resorts International.
Yeah.
They're going to lay off a million dollars worth of what they would have been paying out in salaries and so forth right now.
Right.
I mean, they're challenged right now. Yes, you're right. Small businesses, I think, have it even more so because they typically have less resources.
Exactly. And the small business owner is less sophisticated.
Typically.
Mgm, right?
Yeah. MGM and mgm, Caesar's Entertainment going through the same thing too.
Those corporations have a lot of resources and. And in most cases, well, they're responding to the shareholders because.
Correct.
Saying, hey, you know what? We have to cut costs, we have.
To cut this because we need to. That's why we.
That's why we make a profit.
That's right. That's right.
Small business owners have a different issue. One they don't have. They don't have the flexibility nor do they have the bandwidth to take those type of lumps. Right.
They also don't typically have the time.
Right.
And that's kind of part of your bandwidth concern too. Right. Yeah.
The issue is. And when you look at this says lack of sufficient capital, poor management. Poor management is huge because unlike us, Jess, sometimes, and this is where we got, we got to sit back and say, you know, we're. We're slightly different in a lot of ways. Because you had the experience of being in a gaming and hospitality industry that is very sophisticated in business. Yes, I've had that same. I've had that same fortune.
Yeah.
As well as, you know, couch that with being in the military and understand discipline and mission focus and all those different.
And I grew up in a military environment for the first 17 years of my life, so there you go. Yeah. So we.
Sometimes people don't understand that we have an advantage. Most people come into this game, they don't have the opportunity to understand management, they don't understand discipline, they don't understand mission focus. They don't understand people, they don't understand striking a vision.
They don't understand planning, they don't understand the objectives of planning and the sequential meetings that help you stay on track or the. We talked about earlier in the green room when we were getting ready, STPs, systems, tools and processes. Many people are just winging it. They don't have the proper systems, tools and processes to be successful.
Right.
And by the way, that's an ever changing landscape too.
Right.
When it comes to. You don't just have them and then they stick, right?
You mean.
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