Often at our seminars and events, we survey business owners to discover the challenges they face within their own businesses and one topic often comes through loud and clear.
‘I need to sell more’.
But whilst we agree that growing sales is an essential component of business growth it is often not the real solution to their problems.
Before you embark on a sales campaign first examine the following questions:
Far too often the motivation in the first place is wrong, and many owners see selling more as the solution to long hours, poor cash flow and low staff morale and productivity, often with disastrous results.
Recently I worked with a business owner who had spent the last 4 years chasing bigger sales with good success.
Unfortunately, as the business grew so did his headaches; cash flow just got tighter, already creaking systems began to implode, the demands on his time became greater whilst profits remained static. The harder he seemed to work, the harder it all seemed to get; worse, his home life was rapidly heading for trouble, his relationships with loved ones being eroded by his long hours and short temper. His dream of owning a £1,000,000 + business was rapidly becoming a nightmare.
I can’t begin to imagine how he felt, he was successful! He had set a goal for growth, gathered his team around him and cajoled, motivated and trained them to the best of his ability and it had worked! He had hit every sales target he had set and yet somehow his only reward was a bigger overdraft (and pressure from the bank) and a larger mountain of work, hassle and issues to deal with.
It must have been a devastating moment when he realised, he was the author of his own undoing.
Sadly this is an all too common tale. So where did he go wrong?
The truth is that it costs money to grow and businesses are limited by the rate at which they can grow safely and securely. Furthermore, if the motivation for selling more is to relieve a cash flow problem or to create enough space to employ more staff to reduce hours (meaning you are already over capacity) then more than likely you are setting yourself, and your business up for a very bad fall.
Our poor business owner had simply magnified the problem by not dealing with the core issues which created the lack of cash and profit (not to mention time) In the first place. When we work with business owners, we check a number of key factors within the business before we will allow them to go out selling and we suggest you do the same.
Firstly, and most importantly, look at the end game; where do you want to be in 2-, 3- and five-years’ time? Selling more just to solve a problem is not healthy as we have already discussed.
Secondly, check and get control of the finances of the business; how much stock do you hold, how long do clients take to pay, how quickly do suppliers expect payment, are you pricing correctly, and can overheads be reduced? These parts are crucial as they have a major impact on profitability and cash flow and EVERY business owner should know these metrics for their business off by heart.
Next take a look at the people who will help you achieve your goals; these can be split into three major groups:
Customers: Do you truly understand your target market, do they want what you have to sell and why do they buy from you?
Staff: Do they work late without asking for extra pay? Are they part of the team and working with you to achieve the businesses goals or are they leaving you alone at the end of the day to finish off? If the team is not motivated and behind you, growth will be a very rocky journey!
Suppliers: As you grow so will the amount of trade you do with suppliers. Are they willing to give you the credit you need and can they meet the increase in demand? What impact will this have on their selling price to you?
Now take a look at your systems and processes. Do you have a manpower plan for when the business grows, and how will staff be recruited and integrated quickly into the team? How will you cope with expected demand?
Lastly, conduct a SWOT of your business (Strengths, Weaknesses, Opportunities and Threats) to determine if you have covered everything and put a plan in place to address these issues before you go on a selling spree.
Now I know this seems a lot to do and it is and maybe this is the reason so many businesses don’t do it. Indeed I have heard all sorts of excuses in my time from “it is unnecessary“(a foolish notion) to “I’ll do it after this next big sale which is going to make everything all right” (It won’t).The truth is often they don’t know how to do it or they are trying to take a shortcut, sadly you can’t, and in general those businesses that try, fail.
It’s an old and tried mantra but businesses that fail to plan are planning to fail, and its truth is something that annoys us business advisers no end! We watch time and time again as people struggle without asking for help. I have never tried to build my own house, make my own car or grow my own food; I am simply not qualified. Yet the average business owner tries to grow his or her own business on the same basis and wonders why he/she fails losing their dreams, homes, self-respect and relationships along the way.
So go on, get your business ready to sell more; give us a call and ask for a Diagnostic and I promise to leave the tools in the garage……
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