What’s the deal with being number 1? New theories of the long tail seem to make it less important than it once was, to be the leader in a product range. If your business is one which offers a range of products, or even a range of services, you will quite conceivably have a top seller, a bunch of very popular products or services, and then a lot of “other”. If your product range is vast, “other” as a group, may well be up there with your top selling items.
There are several web sites hosted by South African companies advertising hordes of businesses for sale – 2,000 and even more. An hour spent on any one of these sites will show that although they have all the businesses they boast, very few are presented as having any value or attraction. There are never more than half a dozen worth looking at, and the rest can be classified as “other”.
Does it make sense that when there are 25 fast food places for sale in Johannesburg in a particular week, that the best one will be sold first, and the dive will probably not be sold at all? If your business is not the best, it will have to wait until the best has been sold and moved off the list, allowing second best to become best, and so on until your business moves into top spot. This is all supposing that there will be no additions to the list. Of course this is not the case. I know that the opposite is true because I see it week after week.
Luckily for many businesses, what looks like the best, may not necessarily be so, but conversely, and sadly, the best is often presented so badly that it is over looked by the market, and left to languish amongst “other” until “better prepared” moves off the leader board, and is not replaced by another “better prepared”.
First impressions do count, but when it comes to selling a business, your dressing up will be put to the test, and it is therefore important to do your homework properly, prepare properly and present for the best sale possible. That’s what this serial seminar is all about: Ensuring that you are the number 1 seller at the time, in your industry or business type.
In Seth Godin’s wonderful little book “The Dip” he writes about the difference between being number 1 and numbers 10 or 100. It is usually typical that:
- No 1 gets 10 times the benefit of no 10; and
- No 1 gets 100 times the benefit of no 100.
He then demonstrates with the sales numbers for different ice creams, according to the International Ice Cream Association. Sure enough, Vanilla accounts for about 29% of sales, and Praline (at spot number 10) about 3%. In writing this segment, I looked very quickly at three different lists; one set by a committee, one by natural selection of the public, and the third set by entrepreneurs.
- Prize money for the Master’s Golf Tournament 2008. Although posted in 2006, I’m assuming that as Trevor Immelman’s name was along side, it has remained unchanged, and was as follows: The winner received $1,260,000 while 10th placed made do with $189,000 (1/6,6 of the winner). Prize money is awarded down to 47th place at $20,300 (1/62 of the winner).
- Movie sales for the weekend of April 11 2008 show the best grossing movie was Prom Night at $20,8M, while number 10 was Drillbit Taylor at $2M, and number 100 was Charlie Bartlett at $1,5M.
- The World’s richest list for 2005 shows number 1 predictably being Bill Gates on $46,5B. Number 10 does not follow the law on $18.3B, but take a look at number 100, which comes in at $4,9B.
So the theory works out better for the natural selection than for the committee, under pressure “to be fair”. More interesting perhaps, was the difference between the first placed movie and the second most popular at $12,4M. This demonstrates a difference of nearly 60% in popularity. That’s quite a difference at the top of the ladder.
You can have some fun with this. Google “Zipf’s law”.
So let’s make sure that when your business appears on the market, it is prepared with the best of them, shall we? Stick around, and I’ll show you how.