What can I do to get growth? Last year wasn’t bad, but we’ve been stuck in the same revenue rut for several years now. If I have another year of just making ends meet, I feel like I’ll be ready to throw in the towel.
Most businesses, like people, run into their Peter Principle – they max out what they know, and stop making progress. Most small businesses make enough to get by year after year, but that’s about it. Growing a business long term means building a growth engine.
When an organization’s sales get stuck, the company starts losing ground. Costs continue to rise, from overhead, transportation and materials to personnel. The net effect is that as sales and net income decline, the owners take the hit in reduced payout.
Get on track by assessing your firm’s sales ability:
- What are the steps of the sales process; are they in the right order?
- Does enough information gathering happen early on? Is there a standard list of questions that people ask?
- Is your team always clear about who’s the decision maker, and who are the decision influencers?
- Is the proposal a written confirmation of what’s already been agreed to, rather than a shot in the dark?
- Is the close ratio from stage to stage good enough; what can be done to improve?
At some point, the size of your sales team needs to expand in order to bring in more business. What is the typical amount of sales an average sales person / sales team can bring in? Compare that to the amount of sales expected for the coming year. Is it time to do some recruiting in order to grow revenue?
When looking to add to your sales organization, decide if you need lead generation, or closing skills. Many business owners make the mistake of thinking they need someone who can close sales, when what they really need are more quality leads to follow up on. Do you need to find new prospective companies to do business with (hunting), or nurture existing client relationships for additional opportunities (farming)? Make sure you understand where the potential is, and hire the right person for the job.
Do you know what to look for in sales candidates? Hiring sales people isn’t like filling any other position in the company. In fact, it’s counter intuitive, and many organizations end up screening out some of the best candidates because they’re hard to deal with and pushy – which is exactly what you want in a sales person.
Many business owners shy away from working with recruiters to hire sales people, because they don’t want to pay the fees. Think about what a shortfall in sales will cost your company in net income this year. It may pay to get expert assistance to insure you get the position filled soon with a great candidate.
Once you add another person to your sales team, make sure you have a good on-boarding process. A clear set of goals, training on the sales process, and education on the company’s products or services are all essential. Lay out a 30, 60, 90 day action plan to clarify what’s expected.
Not sure what kind of growth to pursue? 15% revenue increase year-over-year is generally the most profitable way to grow – it gives you time to work on growing profits even faster than sales, which is the real game! You may be able to get away with a one time leap of 20% – 25%. Make sure you can hit an additional 15% growth the next year.
When looking at the sales plan, make sure that you’re growing the right products or services. Calculate gross profit for each product or service that your company sells. Include selling costs to support the growth of each area. Focus on those items that are going to be the easiest to manage and most profitable to sell. Give the sales force specific direction on where you want them to focus and deliver.
