25 Sep 3 Ways to Manage Sales and Growth for Long Term Success
Have you ever had the experience where sales and growth were either happening way too fast or not fast enough? The success of both requires management on the part of the owner and his or her management team. The size of the business will determine what the division of labor is for these management tasks. Here are three ways to manage both:
- Sales management-Do you have a person who is accountable for the strategy and execution of your company sales goals? Having managed sales people in the banking industry for over two decades, it requires attention to specific metrics. How many calls are they making? What’s their close rate? What’s their average sale? In their execution of the process, you have to be sure they’ve properly identified an opportunity, determine if they have the resources to handle the opportunity, if they’re talking to the decision maker(s) and have they got the decision maker to the point of saying yes or no. The maybes can kill you! Having or not having someone accountable the process and the execution will be a determining factor in your success.
- Financial management-Do you have a person who is accountable for making sure you have the cash required to handle the growth? Growth always requires cash. Can the cash come from internal funds (profits) or is a line of credit needed? You also need to be mindful of how much you can borrow on your line of credit. If you finance your growth with debt, there will come a time when you become so leveraged that you’re no longer bankable. As you grow, you will watch your gross and net margins. Often, growth will come at the expense of margin and it will take more sales to make up for the loss of margin. At that point, you may decide to raise prices or slow down to avoid profit erosion.
- Operations management-Do you have a person who is accountable for productivity and process analysis, managing the operations workforce, facility layout and purchasing and inventory management? Often, when sales go up quality can go down. And if you don’t have the right people in place, your reputation as a provider can suffer in the marketplace. Also, if you don’t have someone watching the overal quality of your people, processes and execution in your product or service delivery, the operation can become less effective and efficient.
Having a balanced approach and having people accountable in sales, financial and operations management are key to managing sales and growth long term. When growth occurs, it always requires cash and increases the complexity of the organization. People need to be hired and processes and execution change along with strategy. It’s up to the management to constantly monitor their efficiency and effectiveness in these areas. Often this will include establishing key performance indicators in each of these areas. We will discuss those in our next blog.