If you are a business owner and you have survived the first five years of your business, I applaud you. Sure, it’s been all calculated risks and it has went as the textbooks and YouTube bloggers have said – right? We both know that’s not how you survived, you have burned the candle at both ends while burning it in the middle, cash flow has never been great, you have made some big mistakes but none of them managed to destroy your business but they may have come pretty close. You hired a few wrong people along the way but now you have the right people and a few key accounts that regular buy, so you are now profitable and have some money banked. This is where most businesses owners either decide to push through to become middle to large or large companies or stick with the comfort of where they are at. But should you stay where you’re at or continue to grow the business?
Larger companies’ with operations, marketing and administration cannot survive without profitable customers and as someone who specialises in selling, I believe the sales department and customers is a great place to start your analyses of consideration. In business, accountants will often talk about financial stress testing, but few analysts talk about salespeople and customer being stress tested which is remarkable given the importance that both have on any business.
The owner that thinks their top performers are not going to leave are misguided, as life happens to everyone. Peoples circumstances are changing all the time and the loyal sales employee can leave as quickly as they arrived.
Have you stress tested to see how your business would cope if your top salesperson were to leave and go to a competitor? What if the clients they brought you, followed them to your competitor?
Do you have someone ready to take that salespersons place? Consider a professional team sport, the club will have a few different players who can play in that position who have the experience to hit the ground running. They have scouts out analysing the other top players from other clubs making a list for who next to sign. Non-professional teams have this structure also, yet I challenge you if you’re a business owner, sales director, sales manager, human resources do you have a list of actual names of people that you could call today to fill that position? People who you have engaged with in the past, that knows you have an interest in them.
How long though does it take to recruit a top performing salesperson, the apex player who can shift the dial on your profits, can pick up the phone and get through to key decision makers and ultimately land strategic accounts? Top salespeople choose when they move most of the time, and they tend to go to other top performing companies who share their common values and goals. Placing an advert with a recruitment company is like a shot in the dark when it comes to getting a top performer, if they are happy where they are, chances are they are not looking at recruitment websites, or when they are called by a head hunter and they have never heard of you, the likelihood of them wanting to submit a CV is low.
Do you know the exact percentage of time and resources your team are spending servicing each client? Software companies are acutely aware that they don’t want their resources flooded which is why they have in place a tired solution system, the more support you need the more you pay. I often hear it said, that’s just business Stephen, you need to support your clients. That is true, but if you surveyed your workforce you would discover trends of customers who are more resource intense than others. A quick analysis of your profit margins on the contract verses the resources deployed to service could reveal that what you thought was a profitable account is losing you money. I am then told, that’s understandable Stephen but when you put all the orders together over a year it returns a profit to which I always reply drilling one hole in the bottom of a wooden boat wont sink it immediately, keep drilling holes and you will discover that it does matter.
The question is not whether to scale your business, it is more about knowing you have contingencies for your employees, and you understand the exact financial resources consumed by each client. Without this knowledge any growth only accelerates the chances of more holes in your boat.