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The Sales Problem: Growing too fast.

May 27, 2015

You would think this is a great problem to have.  I am working with several companies that are going through this, and it is not as much fun as one may think. I am writing this because there is nothing worse than telling a Sales person to stop selling so much.  How de-motivating is that?  However, I am currently consulting with a company that is afraid that too big an order will come in, and they will not have the cash to buy inventory to fill it.  Another one is in the dilemma in that every time he gets a big client he must hire a new person.  I personally went through this predicament when I was hired and helped start an International company that grew from 0 to $40M in 9 years and the cash and people issues seemed were never-ending.  As one boss once told me “You do not have problems till you sell something”.

So what are these problems?

Number 1 is Cash.   Inventory management, accounts receivable management, and staff costs are the most critical during any growth phase.   If you cannot answer positively to the following three questions, you should really re-think how important it is growing your business.

  • Will top line growth translate into bottom line growth?
  • Can margins be sustained?
  • How will it affect me personally?

Remember we take cash to the bank, not revenue.

More business means more overhead with people.  Be careful that you just do not add people to solve a problem.  Better to think how we can automate more and save on the people cost.

Just as critical as cash is planning your recruitment and management planning. Most small business owners must give up power and control, and learn how to effectively delegate.  They wear too many hats.  Adding the wrong person is very costly.  There are tools out there to help you.

Who will you need and in what positions if your company doubles tomorrow? Can your present sales force adapt to the possible changes in the company about technologies and policies?  Now that you are growing you need put in place process, policies and rules.

If you are going to grow make sure that the growth is sustainable.  It is critical that your sales people do not lead you down the path of big orders with no profit, and long collection periods.  This is a difficult scenario, because you want to keep your sales people motivated, but they must understand the impact of sales on business and their own futures.  Make sure that you are aligning their compensation with what your company goals are.

Another area which is mission critical is TECHNOLOGY needs.   Do not just buy computers and software because you must have them.  Make sure that what you are buying integrates with your basic financial software and your CRM.  The right technology and automation tools are critical in keeping down people costs, minimizing errors, and overall communication.  The upfront cost may seem daunting.  However, the ROI will be seen within months not years.

Take a few minutes and imagine your business doubling or tripling in the next year, and what that would mean in the following areas.  There are many more areas that you can add, however these are the basic ones.  I suggest you get your team or a trusted advisor (like myself) help you with this.

Category

Existing Number

Present Cost

Forecasted

Forecasted Cost

EMPLOYEE IMPLICATIONS

Sales & Marketing

Management

Administrative

Operation

Manufacturing

Technical Service

TECHNOLOGY IMPLICATIONS

Software Needed

Equipment (Phones-Computers)

MANUFACTURING IMPLICATIONS

Equipment (buy or lease)

FACILITY IMPLICATIONS

Office Space

Manufacturing Space

Environmental Controls

If I can be of any service, please give me a call at 480-656-3565 or write me an e-mail at allan@salescoachaz.com .  Till next time and remember “Sales is Not a Dirty Word Just a Higher level of Communication. “ 

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