Start Up Blog

The truth about small fish

Posted in entrepreneurship by Steve Sammartino on November 30, 2010

When starting out or chasing new customers on an existing business it makes sense aim for smaller players first, to build confidence, and get a few small wins on the board…. right?

The problem with thinking like this is that it makes life harder and less profitable.

The truth about small fish, is that they are harder to catch than big fish. They’re more elusive than the big guys and are often much harder to convince to invest their money in whatever we are selling. With the small fish the decision is often about whether they should invest their money or not. The advantage of the big fish, is that the investment funds are usually allocated, it’s more a question of doing business with company A or company B. From a  revenue perspective it’s far wiser investment of time to court a customer whose decisions to invest are already made.  A $10,000 customer is harder to get than a $1,000,000 one.

The other factor worth considering is our reputation. If we become successful selling to the small players, we’ll be seen as a small solution provider.  But if we land a big one it gives us a license to knock on other big doors. When the investment is time, its worth chasing the bigger reward, and the truth is that it’s often an easier sell job.

twitter-follow-me13

15 Responses

Subscribe to comments with RSS.

  1. Paul Woods said, on November 30, 2010 at 10:52 am

    So true… as someone (intrapreneur) who has been bootstrapping a new business inside a larger one, I have learned this lesson very quickly – it is much easier to capture the budgeted spend of the big end of town, vs those who need to be convinced that it is a good idea in the first place.

    It is easy to differentiate yourself from a competitor, however it is a lot harder to differentiate yourself from “do nothing”.

  2. AJ Kulatunga said, on November 30, 2010 at 11:09 am

    Hey Guru,

    another great blog post from you. From my experience it all comes down to self confidence in your abilities surrounding your business. A lot of entrepreneurs starting out don’t have much confidence and thus want to start out small secure the Nemos first. Then you have a few which have oodles of confidence and are able to get out there and chase the Moby Dicks of the corporate world.

    So… what is your best tip about building confidence in yourself and your abilities as an entrepreneur to help secure the big fish?

    AJ~

    • Steve Sammartino said, on November 30, 2010 at 1:15 pm

      My number 1 tip on building confidence is ‘Do your homework’ – if we do this then we’ll be at least as prepared as our competition and so we have the right to compete.

      One other thing for building confidence is knock on as many doors as possible. As in anything in life, the more we do it, the less we ‘worry’ about it. And being worried, is the opposite of being confident.

      Steve.

      • Aj Kulatunga said, on November 30, 2010 at 2:24 pm

        Perfect Answer!

        Aj (@BLKMGK01 via twitter)

  3. Yalcin said, on November 30, 2010 at 12:57 pm

    There are plenty of big fish in most industries anyway.. Even if not, go back and keep knocking on their doors. The confidence gained from reeling in a big fish is so much greater than a small fish.

    Nice post.

  4. Ben Tollady said, on November 30, 2010 at 1:18 pm

    Yep!

    Ben (@tollady via twitter)

  5. Paul Woods said, on November 30, 2010 at 1:20 pm

    So true!!

    Paul Woods (@paulwoods via twitter)

  6. MDA Studios said, on November 30, 2010 at 4:49 pm

    What a great thought!

    @mdastudios (via twitter)

  7. colin8ch said, on December 2, 2010 at 11:39 am

    I can’t agree more with your thoughts about reputation. Even if the big fish takes as much to catch as the small one, once you can show other big fish your big name catch on your customer list it automatically gives you credibility. Very useful for getting your foot in the door as your prospects will at least want to know what their competitor is doing.

  8. Andy Thoseby said, on December 8, 2010 at 7:33 pm

    I spend too much time asking my recruiters to not respond to the HR Administrator that wants the best people, at the lowest salary, pay the lowest rates, avoid psychometric assessments, and brief 3 providers for a junior job and instead focus on helping senior executives build their teams with appropriate skills and talent. These people are easier to deal with, treat you as equals, listen to your advice, challenge you to get it right and return your calls. They understand the valueof people that create value – i bleat on about this at peopleperformanceprofit.com

  9. Bobcats said, on December 10, 2010 at 12:30 pm

    Very true starting small but looking for big clients is the way to go.

  10. Alan said, on December 10, 2010 at 8:46 pm

    Very good post. Aiming high can give you a burst of motivation and energy. However, this approach is not applicable for every sector and situation. Start-ups, often characterized by short trading history, are very likely to face difficulties when competing with established businesses.

    I reckon that the golden mean is to split your sales efforts into ‘small fishes’ and ‘big fishes’. The balance between two would depend on factors like competition, economy, your current financial situation etc. and should be constantly reviewed. In that way you may not only secure constant development and improve cash flow but also find some ‘big fish’ customers. :)

  11. Vic said, on December 11, 2010 at 6:17 am

    Steve great write up!

    This is 100% true! Small businesses are cash poor and they will suck you dry if you are in the services business. They always want more than what they pay for, and they don’t think twice about walking out on a bill if money gets tight. Big business can benefit from the outside thought of small consultants, who bring the non-corporate approach to the table. It really becomes a win-win. Once you are in, if you do a good job, you will see other opportunities from within the company. Most importantly big business always pays.

  12. Vic said, on December 15, 2010 at 1:32 pm

    Here is a video my old business partner sent me recalling some of our dealings with smaller customers:

    http://www.dump.com/2010/12/13/the-vendor-client-relationship-in-real-world-situations-video/

    It drives Steve’s point home. If you have ever been in the situation, this video will keep you laughing to avoid crying.

  13. Rob said, on December 20, 2010 at 9:03 am

    This is so very true. We recently target “entry level” industry to boost some volume and give new staff something to get their feet wet with low-risk projects.

    What we found is that the work, money, and effort that went in to finding many small clients was FAR higher than what we usually did for a large, or even multiple large clients.

    It helped illustrate to us that while we will certainly serve these smaller clients who come to us with the same respect and attitude as a large client, we certainly will not continue to chase them.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 1,189 other followers