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Back-End Sales for Your Home Business

Avoid Common Mistakes that Keep You from Getting the Best Deals

By Steven Strauss

When I started my law practice — my first real business — in March of 1994, I was not even sure what sort of law I would specialize in; all I knew is that I wanted to be my own boss.

About a week after I opened up shop, I received a phone call from an ad rep at the local newspaper, inquiring if I wanted to be in the “Services Directory.” It sounded like a good idea to me, so I said, “Yes.” He then asked what type of legal ad I wanted to run. “I’m not sure,” I replied. He then said something that changed my life: “If you want the phone to ring,” he said, “you should put in an ad for bankruptcies.” I did, and business boomed. It turned out that I liked helping people out of their financial problems.

What I did not know at the time is that the bottom would fall out of my business come November and December of that year. Why? It turns out that people don’t like filing for bankruptcy during the holidays.

Not to be caught in the same trap again, the next year, I created a new “division” of my business and began a wills and trusts practice, which I emphasized as the holidays approached. It worked perfectly. In fact, my old bankruptcy clients became the best customers for my new area of practice as they were all about getting things in order.

In business terms, what I learned the hard way was that, to succeed, every business needs back-end sales. Just as an investor knows not to own just one stock (the stock may go up or it may go down), so too should the smart home-based businessperson have more than one way to make a buck. By offering additional products or services to existing or potential customers, you vastly increase your chances of long-term success.

In her great book, Making a Living Without a Job (Bantam Doubleday Dell), Barbara Winter calls this creating “multiple profit centers.” Having multiple profit centers, or back-end sales, not only lessens the effects of the dreaded business cycle, but it will enable you to grow your business as people will come to depend on your for a variety of products or services, not just one.

Creating Back-End Sales Channels

You begin to create your new sales channels by simply noticing what businesses similar to yours sell. What is it they sell or do that you could offer without a high learning curve? Look for logical extensions of what you already do.

For example, let’s say that you are a home-based massage therapist who sees people in your spare bedroom. First of all, you could buy a portable massage table and go to customers’ homes. What about also getting a gig working part-time at a local health club? Or, maybe you could go around to all of the best hotels in the area, speak with the concierges, and get on their lists of massage therapists to whom they refer guests. What about offering 10-minute massages to corporations with stressed-out executives? Now, instead of only one profit center, you would have four or five.

  • An antique dealer who sells antiques from the barn in the back of his house could also sell them at local shows and on eBay. He could also offer to sell his clients’ items on consignment. Maybe he could offer antique restoration services.
  • An online store could find additional products that complement its regular offerings.

There are innumerable ways to bring in money from one business and create back-end sales channels if you just get creative. Try this brainstorming exercise: Write down 10 possible new ways to generate income from your home-based business. Jot down any idea that comes to your head; you can edit later. Ask your spouse or a valued friend for any ideas he or she might have. Cross out the ridiculous ideas, and see if you don’t end up with a few gems.

Finding Additional Products to Sell

One issue that new entrepreneurs especially have difficulty with when trying to implement a back-end sales strategy is that they may not know where to go to find complementary products. Luckily, we are living in the Internet age. One of my favorite sites for finding wholesale suppliers is goWholesale.com. This Internet product portal sources wholesalers for almost any product you may want to sell: Clothing, gift baskets, candles, books, phones, pottery, toys — you name it. Of course, you also can locate your own wholesale distributor by simply typing your keywords into your favorite search engine.

The important thing to keep in mind as you look for additional products to sell is that whatever line you decide to carry should be complementary to your current offerings. You are building a brand, and people have to know what your brand stands for. If you sell high-end jewelry online you most certainly do not want to start selling cheap costume jewelry. Remember: A good brand attracts some people and repels others. That’s OK. That is the idea. Starbucks is not for everybody.

The Challenge

However attractive this concept, it doesn’t come trouble-free. The major disadvantages to working this way are two-fold:

1.   Becoming overwhelmed. It’s possible that you might lose focus trying to do more than one thing at a time. Not everyone can handle having several projects going on at once. The key to successfully running more than one enterprise is organization. You may decide to devote Mondays, Tuesdays, and Wednesdays to one endeavor, and Thursdays and Fridays to another. Having separate, color-coded file folders for each profit center may also help.

2.   Juggling. Let’s say your main business is a mobile auto-detailing service, and you decide to start a car-alarm installation business as a second profit center. Detailing is a client-intensive business, and you have to be sensitive to the needs of your clients, but by the same token, you don’t want to get so busy detailing that your alarm business drops. The way to avoid this is to learn to juggle your time and resources well. Be professional, make appointments you can honor, and keep that Blackberry handy at all times.

The Long-Term View

Great businesses, large and small alike, emphasize back-end sales. They offer their customers a variety of options.

Billionaire Richard Branson, owner of the Virgin Group, says that he had the multiple business model in mind from the day he began building what would become an empire. That’s why he eventually named his business the Virgin Group. Virgin Music was soon joined by Virgin-Atlantic Airlines and Virgin Cola, among others. Don’t think that Branson is so unlike you; he began the Virgin Group with a single record store above a shoe shop in
London, and he bartered his rent.

The best thing about multiple profit centers and back-end sales is that, not only are they good business strategies, but they can be fun as well. And it need not be that difficult. If other entrepreneurs have figured out how to create multiple profit centers, you can, too. And you’ll be glad you did. HBM

Steven D. Strauss is often called “America’s Small Business Expert.” He is the author of Small Business Bible. If you would like Steve to speak to your group or help your business grow, or if you would like to sign up for his free newsletter, “Small Business Success Secrets!,” please visit his website, the All New www.MrAllBiz.com.

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