With Any of These 7 Symptoms, Making More Sales May Turn Your Life Into a Living Hell
If your business isn’t running like a well-oiled machine and you want to grow, reading this is going to save you a lot of pain.
A lot of companies want to grow. Not all of them are ready to.
Over the years, I’ve heard a lot of catchy sayings like:
“Sales cure all.”
“There aren’t many problems that can’t be fixed by more sales.”
“If we make more sales, we’ll have the money to solve some of these problems.”
That’s absolutely true, except when it’s not.
One of the things that I’ve observed in the companies I’ve worked with is that when your operations aren’t efficient (because of the business model you’re currently using), more sales equals more pain. And, a lot more sales will turn your life into a living hell.
Assuming you’re still here, what are some of the symptoms that you’re business model may need to be re-evaluated?
Symptoms Your Business Model Is No Longer Operating Efficiently
If you’re experiencing any of the following symptoms, your current business model may be the culprit:
- You are spending your time putting out a lot of fires
- When issues occur, there’s a lot of finger-pointing regarding who is to blame
- You are spending a lot of time answering the same questions and dealing with the same issues
- An additional sale equates to an additional unit of your time that must be invested
- You’re having problems fulfilling on existing orders, contracts or subscriptions
- You’re dealing with an increasing number of customer complaints or issues
- Each additional unit of sales represents one additional unit of work for you or your employees
In the course of working with and for a variety of companies ranging from mom and pop brick and mortar businesses to industry behemoths like Intel Corporation and Home Depot, it’s been my observation that these symptoms are a result of operational inefficiencies resulting from some part of your business model.
The way your business operates is largely a function of the business model you have in place.
Among other things, your business model (whether it’s documented or just in your head) defines HOW your business operates.
I’ve noticed that a lot of companies create a business model that works for a period of time, but then operate as if that business model is cast in concrete.
For the majority of businesses, both you and your business model need to grow as the business grows. What worked to get the business OFF the ground can very often be the very thing that runs you or your business INTO the ground.
Don’t Scale Up a Kitchen Fire
If you were running a restaurant, and one of your recipes was causing kitchen fires, the last thing in the world you’d want to do is scale up the number of orders for that recipe. But that’s what a lot of business owners are doing when they focus on sales and marketing before addressing the root-causes of the fires that are popping up.
If you’re going to scale up, it’s a lot more enjoyable to scale up a business that’s running like a well-oiled machine instead of one that’s full of headaches and stress.
You can either invest the time and effort to upgrade your business model to enable you to scale up sustainably, or you can work more and more hours to fulfill as you grow.
How you scale up sustainably requires a good deal of thought and a systematic approach, which is why I’ve systematized it into something I call the “Strategic Scaling System” which addresses each area of your business.
But first, let’s ask an important question…
Can Your Business Model Handle Additional Sales?
If you’ve upgraded your business model to accommodate for sustainable growth, then the cost of adding more sales will often just be a fractional amount of additional work – something that can be handled by adding additional employees, additional contractors, or through strategic partnerships.
On the other hand, if you haven’t upgraded your business model to efficiently accommodate sustainable growth, then adding more sales translates into a greater strain on you and your organization. When one unit of sales represents one unit of work, your business either has to expand or you and your workers have to work additional hours.
Fortunately, more and more tools have become available to allow businesses to scale efficiently.
Let’s look at a concrete example.
If you were to start a business that relied on mailing a DVD to your customers, you might test the waters by creating a DVD on your computer each time you receive a new order. Assuming your customers are happy, they start spreading the word while you ramp up your marketing orders. At some point, you end up spending the majority of your day making DVDs on your computer and you work late to do everything else that needs to be done.
Realizing this is a critical task, but one that has a high-opportunity cost, you might hire someone to come in and make DVDs all day long. Before long, you need to hire another person and then another. Each additional hire drives up your labor equipment expenses. It works, but it’s not very efficient.
Since you are interested in scaling your business up efficiently and because you don’t want to sit in front of your computer all day making DVDs, you bring in an expert. The expert, who is familiar with helping business like yours run more efficiently, introduces several options you weren’t aware of:
- Buy or lease a DVD duplication machine capable of making hundreds of DVDs per hour
- Contract with DVD fulfillment companies capable of making thousands of DVDs per hour which also have a pick, pack and ship service
- Upgrade your existing sales funnel and fulfillment system to allow for the delivery of the contents of the DVD online
Depending on your customers and their comfort level with technology, each of these options significantly reduces your labor costs, and options 2 and 3 can be set up once and happen automatically with virtually no human interaction.
Choose options 2 or 3 and you are free to focus on sales and marketing knowing that each additional unit of sales represents virtually no additional units of work on your part.
You may even recognize some similarities between this scenario and what happened with the competition between Netflix and Blockbuster.
If your customers are comfortable with watching videos and reading content on their phone, laptop or tablet, option 3 (instant online delivery) also allows you to provide instant gratification to your customers while increasing the probability they’ll consume the product. Sometimes, operating more efficiently doesn’t just make your life easier, it also improves the customer experience.
In this scenario, you can feed more and more fuel into your marketing and sales machine without straining the capacity of your business.
Fulfillment Is Just One of Many Areas Where Efficiency Is Beneficial
A lot of the businesses I visit or speak with that are doing between $500k to $10MM in sales have a lot of opportunities for efficiency upgrades and not just in the area of fulfillment.
Just a few of the additional areas that can benefit from efficiency upgrades include:
- Customer service
- Sales and marketing
- Administration and human resources
- New hire on-boarding, training and leadership development
- Hiring and performance management
- Roles, responsibilities and key performance indicators (KPIs)
Naturally, improving efficiency in each of these areas translates into higher productivity and improved morale, both of which play a factor in profitability.
And, improving efficiency improves your ability to attract desirable employees who have their choice of employers.
Given the choice, wouldn’t you prefer to work for a company that runs like a well-oiled machine versus one that is frustrating and stressful?
Let’s Look at a Case Study
In one of the companies I worked with, the average high-ticket transaction required an average of four hours of time to prepare the contracts and necessary documentation. The same people that were making the high-ticket sales were doing the paperwork.
This meant that each salesperson was losing four hours of time on paperwork for every deal they did instead of spending that time to generate additional sales.
All of the paperwork was necessary and the process they were following had worked for them for years. They were doing the best they could with the resources and technological knowledge they had.
I spent a few days understanding the process and putting a new process in place. It generated all of the same paperwork. The only difference was, it did it with only 15 minutes of work.
That translated into three hours and 45 minutes of time per transaction that was then redirected into doing additional high-ticket sales.
This was a case of Pareto’s Principle, where 80% of the effort was generating 20% or less of the results (the paperwork) while 20% of the effort was generating 80% of the results (doing the actual deals).
In addition to the financial benefit, one of the biggest side-benefits was the removal of the “pain” associated with doing each additional deal because the high-producing salespeople no longer had to spend copious amount of time in the office in the early morning or evening in the office.
That translated into happier salespeople and happier home-lives (which in turn helped increase morale and reduce turnover).
The Key Takeaway
Money (via more sales) is an accelerant. It’s a magnifier.
If you’re business is running like a well-oiled machine and you have everything in place to deliver on additional sales without creating a nightmare scenario where you and your people will be strained and working unsustainably, then by all means, ramp up your sales.
On the other hand, if you’re experiencing a number of painful issues in your business and that pain will be amplified as you ramp up sales, then revisit your business model, which includes your systems and processes. Get your business dialed in so additional sales are a blessing and not a curse.