I’m dedicating this weeks blog to one subject; predictable sales growth. This is the holy grail for most SME’s. Imagine being able to plan for growth based on a stable platform of sales that you could forecast?
Can a business truly predict revenue with certainty or is it fanciful to think this is attainable? This week we unpick the bones of this complex issue.
Predictable sales growth – Goal or flight of fancy?
If you had the confidence to know that you could accurately forecast your sales what would it do for your business? How easy would it be to take decisions to invest in more people or scaling up.
Back in the day……
When I worked at Tesco (in the late 80’s) the Finance people were able to forecast the weekly turnover of each superstore to within a few thousand pounds. Bare in mind these stores could turn over a few million a week and you’ll get some sense of how impressive this feat was. I’ve no idea how precise they can be these days but with all the changes in the food retailing industry I would happily bet that this level of accuracy is harder to achieve.
So what about a small business? Is it really possible to predict forward sales volumes?
Well I’m going to say that for the vast majority of small businesses the ability to predict revenue with any degree of precision will always be a pipe dream. It depends on a number of two key factors; the level of change in your market and the profile of revenue you receive from customers.
Let me explain by way of two of my clients businesses. one installs residential swimming pools and the other is a lighting and electrical wholesaler.
Setting the world alight
My lighting wholesale client has seen their market change fairly significantly with the advent of LED and energy efficient products. Not only have these new products been introduced but legislation also means that they will have to withdraw the sale of some of their products. Historically their customers purchased regularly in order to replace lamps. This enables a predictable pattern of revenue to be established even though it was unique to each individual customer. The revenue is also subject to seasonal spikes (customers spend tends to increase as the nights close in). However with the advent of energy efficient products my client is now adapting to a change in revenue profile that will mean higher value orders but with less frequency. This new pattern has not yet been observable for long enough to establish what the new revenue profile is. This means we are a little in the dark when it comes to predicting forward revenue.
Contrast this with my swimming pool installer. They sell swimming pools to end consumers. These are high value items of which they sell around twenty a year. They do have other smaller value product lines but you would characterise their revenue profile as ‘lumpy’ and sometimes ‘seasonal’ (the first sign of warm weather tends to result in a spike in the number of leads they generate.
So just these two, not untypical examples, prove a point about the challenges of predicting revenue. Just when a predictable growth pattern begins to emerge the market changes making the historic data largely irrelevant.
However if you are serious about building a bigger business, rather than someone who just recognises it as a good idea, you must understand your revenue profile and optimise your sales and marketing effort around it, as much as the evolving market will allow.
Above the line
There are big pieces of the revenue profile jigsaw, that are within your control.
You have the ability (if not the will) to
- track the volume and source of new business leads into your business
- measure the conversion rate from lead to sale
- measure sales and transactions by customer, product and month
If you are diligent and willing to measure these simple numbers over a period of time a pattern will emerge. From this pattern you can build a picture of your revenue profile. Understanding this data allows you to
- unlock the fastest and most profitable growth strategy for your business
- detect shifts in your customers behaviour
Now none of this is rocket science yet so many businesses find excuses why they can’t do this: we are too busy, tracking leads is difficult, our systems aren’t set up like that…etc etc.
It is thinking and behaving at this level that is the TRUE reason why you are not making your sales number or creating the type of results you know that are within your grasp.
So here is the one action you really need to take if you want to grow your sales to a level where options for growth become available to you. Come and spend a day in getting to grips with the root cause of the problem. This is the grounding of you and your team in relation to the job of selling. A shift here equates to a huge shift in sales results. I know because I have coached countless sales people and owners to do just this.
If you are an owner or director in a business that needs, or wants, to make more sales and are ready to tackle the real obstacles that hold you back, this is going to be something special. I am running three one day sales grounding sessions in a range of locations around the home counties. There are only ten places in each workshop so you’ll get lots of personal attention too.
During these events you will
- make a few simple changes in how your company shows up in the sales arena. Your thinking will shift dramatically so that you and your team are willing to engage your market and prospects without company wide ‘sales anxiety’
- learn the tried and tested ways that you can quickly boost sales and create a more predictable flow of sales into your company
- complete a simple one page sales planner and performance tracker that will help you plan to calculate the levels of activity required to deliver a massive shift in your sales levels.
- gain a solid grounding in the key things that need to happen for a sale to take place so you can adapt your current approach
The event dates and details are here.
Places are just £100 + VAT and include materials, a video recording of your event and a copy of Sleeping Tiger RevolutionShare