Focus on strategies for sales growth
Even the most effective businesses find it tricky deciding where to focus their immediate efforts.
Circumstances dictate that you may need to drop everything and improve profitability at one time, then change tack to deal with recruitment at another.
But if there is one aim that will continue to dominate in 2019 and 2020, it’s driving sales growth.
It isn’t surprising that increasing sales is a key focus for ambitious companies. Delivering year-on-year growth encourages a mentality geared towards continuous development. However, while strategies that help you increase your customer base and boost revenue are a good thing, growth alone isn’t enough to support and sustain a company if it isn’t meeting the right conditions.
Businesses face a number of challenges when growing. Not being prepared for growth poses the greatest risk. This is why it’s important to have the infrastructure in place before you grow.
Scenario setting can prove useful here. Building robust three-way forecasts are essential for growing businesses. To avoid over-trading, it is critical to have clear visibility of funding requirements, headroom and working capital requirements.
This could be as simple as considering where sales growth is going to come from. For example, is there a growth opportunity within a new market or product? Or is there an opportunity to move to an online or e-commerce platform?
A long-standing issue that BDO has seen in businesses at all stages of their life cycle is that while it is important to grow, it is more important to understand how you will sustain that growth (e.g. will you need funding or more staff?). Organisations must understand these fundamental business issues in order to maintain future growth and avoid collapse.
Consider the following takeaways as you strive to grow your own company
Situation: “We overreached without properly gearing ourselves. It was an oversight that could have easily been managed.”
Tip: Analyse your position to understand where you are exposed.
Situation: “New upgrades on phone and tablet platforms meant we had to update our technology, but the updated platforms were incompatible with some of our other products and features.”
Tip: Take time to consider your investment in infrastructure and don’t be afraid to change tack as times progress.
Situation: ‘We just bought a new server, and it’s already not coping with our needs!”
Tip: Carefully consider your technology needs. Software as a service (SaaS) is an incredibly flexible model for growing businesses to access best-of-breed cloud technology as they evolve.
Situation: “We were dependent on a single third party to drive sales. No longer able to use the channel, we were left completely in the dark and unprepared. We were forced to develop our own channels. Although a lot of our original buyers found their way back to us through our rigorous online integrated marketing campaigns, it would have been easier if we had done it the right way from the start.”
Tip: Create your own dedicated buyer following and where possible, create your own sales platform too.
Situation: “We didn’t realise a number of our products were ultimately based on a trend and we weren’t sufficiently diverse to survive a hard-hitting slump in sales.”
Tip: “Don’t put all your eggs in one basket. When expanding, don’t just focus on driving existing products into new markets, but also use the time to focus on building new products.”
A plan for growth is important, but focusing on execution is key to success.
Many businesses fail not because of the strategy or growth plan, but because they didn’t execute it well or because they didn’t account for sustained growth. There are many fundamental business issues that companies must understand to maintain future growth and reduce the risk of collapse. To overcome this, get into the habit of asking yourself these questions:
- Is your leadership team regularly assessing the business environment?
- Does the business have the resources or capability to deliver the strategy?
- Do your people know what the strategy is?
- Are your leaders actively involved in measuring and monitoring strategy implementation?
- Have you broken down your strategic objectives into manageable projects?
- Are you holding people accountable for their performance?
- Do your people have the information required to make effective decisions?
- Do you have the right people with the necessary skills, knowledge and experience to achieve your plan?
- Are you helping your people to deal with change effectively?
Finding the answers to these questions will help you avoid the pitfalls of poor execution.