Have you been reaching to grow your sales for years and you can’t seem to move the numbers?
You’re at $250,000 reaching for $500,00 or $500,000 reaching for $750,000 or $750,000 reaching for $1,000,000, you get the picture.
It’s been the same story for 5 to 10 years. You’re frustrated — why is the next tier so much harder than the last one and taking so much longer?
You’ve tried lots of things — marketing, social media, adding new products, hiring a salesperson, the list goes on.
Here are nine reasons sales remain the same year over year and what you can do right now to set a path toward sales growth. Read the headings below and dig into the one that speaks to your situation.
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1. Your Operations or Systems Aren’t in Place to Scale and Grow Your Sales
If your business is in any sort of light manufacturing whether it’s food production or handbags, your supply chain, inventory management, and everything in between must be set up for scale if you plan to grow.
If you find yourself running out of inventory, having issues with quality control, too many returns, or any other operational area is constantly stressed, this next step may be for you.
Next Step: Set up a special project to fully evaluate your operations to identify the areas you need to upgrade to enable growth in production. Try using flow charts to map out the existing processes and where each one intersects with the others. Get teammates involved in the documentation.
Review the final version with your team and prioritize where you’ll make improvements. Examples of possible gaps include software functionality that requires new customizations, vendors who aren’t meeting all your needs, or manual processes that need to be automated.
2. Your Time Is the Bottleneck
I’ve heard hundreds of owners tell me, “I have to do this myself; I can’t delegate this.” If this is you, you know who you are. We’ve all been burned with outsourcing something to the wrong person and getting lousy results. Don’t let this experience stop you from learning how to delegate correctly. If your company can’t grow because you’re doing all the delivery and are at capacity, or you don’t have time to look for new customers, it’s time to train and delegate if you’re serious about growth.
Next Step: Make a list of all the things you’re doing for your company and carve out the items that if another person did competently, you’d be able to increase capacity where necessary to grow your company.
Write a job description with a robust company description, an inspirational title with a description of what will make this candidate successful (your expectations), the responsibilities, and qualifications. (Find well written JDs on the websites of your favorite major brands for ideas.)
After getting clarity on what you’re searching for, create a process for in depth interviews, reference checks, and creating a 90-trial period for the winning candidate. After the hire, use robust on-the-job training to set you both up for success.
3. Your Market Is Small or Too Broad
If your market is too broad, check out this article on narrowing your niche. If it’s too small, you can look for opportunities to expand your brand into new areas of the same category in alignment with your company’s mission.
When I thought about my next area of growth for my former company Butter Beans, I thought about how we could enter the family dinner delivery market when we ran out of new school lunch partners. I knew there were only so many schools and one day I would possibly need to think about other avenues for growth.
Next Step: Examine your business model and determine opportunities to diversify your offering that will increase sales from existing customers and/or pick up new customers. If you need a template to help you analyze your business model, click here for a business model canvas.
4. A High Concentration of Your Sales Is With One Customer
When you’re first staring out, you likely have a high concentration of revenue with one to three clients.
At first this is not a problem; however, relying on these few clients over time can increase the sustainability risk of your business.
If one client decides to leave, you’re in trouble.
Next Step: Create a simple prospect pipeline in a spreadsheet and commit to calling on one new prospect every day. If you can commit to more, even better. Click on this page and find the Sales Pipeline Excel Template for a free template to get started. Or, sign up for a free trial for a CRM tool such as Pipe Drive.
5. You Trade Winning and Losing Clients at the Same Time
If you’re losing clients as fast as you’re winning them, it’s time to slow down. Steady, measured growth allows you to delight your customers once they’re onboard so you can continue to deliver beyond their expectations. That’s where you want to be. It’s a lot cheaper to keep a customer you’ve already won than to find a new one.
Next Step: Create a list of reason codes for why the last several customers left. Find any commonalities and figure out what you need to fix so you keep and grow your existing client base. Take these learnings and follow the Prospect Pipeline building exercise in #4 above.
6. Your Offer Is Too Broad
If your offer is broad, prospects aren’t going to immediately think of you when choosing a vendor. Whereas, if your offer is specific, those needing that specific thing will think of you every time.
For example, if you’re a dog groomer specializing in dogs between five and 10 pounds and your work is amazing and known to all the small dog owners, you’ll get a reputation and be known for this specialty with more referrals than you can imagine.
Word will get around and everyone with that size dog will think of you. If you groom all dogs, your offer is just like the rest of the groomers and you will not come to the top of people's minds most of the time.
Next Step: Figure out how to narrow your offer if it is too broad, making it hard to market, prospect, and grow your sales.
7. Your Value Proposition Is Not Messaged Clearly
If prospects aren’t connecting the dots as to what problem you’re solving for them, your messaging could need an adjustment. This may be true if you’ve lost multiple deals you believe you should have won.
Next Step: Ask your best clients to share in their own words the benefits they get from working with you as opposed to someone else.
Use this language to improve how you describe your solutions when you’re pitching and see if this gets you further along in the sales process. Ask the clients for testimonials and to be references while you’re at it.
8. You Don’t Have Enough Cash to Pay for the Sales Growth
If you find yourself constantly out of cash at the end of the month, it may be difficult to grow your business. Growth requires investment — higher inventory, higher accounts receivables, marketing expenses, fulfillment costs, etc.
Next Step: If you’re out of cash, before you plan to grow, get a handle on what changes you need to make internally to get your profit margins to a minimum of 10 percent, ideally 15 percent to 20 percent or more.
If growing top-line revenue is part of the path to higher profits, to leverage fixed costs, be intentional about this and watch the numbers carefully as you add more clients. If you’ve been spending too much money or taking too much out and didn’t realize it, you can get that under control and start saving.
This coupled with a line of credit from your bank will be sources of cash you can use for steady, measured growth.
9. You Didn’t Set a Sales Goal
If you typically don’t set sales and profit goals at the beginning of the year, at some point, growth is going to level off. Your business will reach a point where development effort is required to gain more customers and grow your sales.
Next Step: Set SMART (Specific, Measurable, Attainable, Relevant, and Time Bound) goals for the next three to six months and put a plan in place to allow you make it happen. Use the Prospecting and Pipeline guidelines from #4 above. Learn from this process and set annual sales goals with quarterly milestones for the next year.
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The Bottom Line on How to Grow Your Sales
Growing your business takes commitment, just like starting your business once took. Always remember that what got you here, won’t get you where you’re going. You must take your game up a notch to grow.
Start with one area you can improve and focus your attention there to test if that helps prepare your business to grow your sales.
After all of this analysis you may realize the real problem is that you’re afraid to make decisions that are different from the past because you don’t know what will happen next, and if you can handle it. If that is the case, let me assure you, you can handle it, so go for it!
Belinda DiGiambattista is a serial entrepreneur, business coach, and outsourced financial controller, and can be found at www.belindadi.com.