Top line holding you back?

The top entrepreneurial challenges for most business owners. We’ve all been there – P&L not growing or even shrinking? The balance sheet an embarrassment and not credit worthy? Cash flows down the drain? We discuss one of the prime causes here and how to address it.

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“80% of businesses fail due to lack of sales!”

Ernst & Young

The Entrepreneurial Malaise

The E&Y statement seems obvious. Unfortunately, many entrepreneurs fail to focus on this challenge to their business and their future.Then, there are some other reasons, such as poor execution, mismanagement, regulatory restrictions, changing markets, etc. that make up the other 20%. Some of these merely become excuses and justify why things have tanked. Many business owners don’t focus on the 80% to ensure their survival and growth.

Lack of cash is frequently touted as a prime reason for business failure. Access to cash has only three sources – Investments, Loans and Sales. How will the investor be rewarded? And how will loans be redeemed? Only a sufficient level of revenue is the answer. Ergo – Sales deserves most of your attention and efforts. It is the prime entrepreneurial challenge!

A symptom

Our estimate is that 90% of the entrepreneurs of the 80% of businesses that are limping along or face closure are mainly embroiled in the technical and procedural aspects of their profession or trade. Quality, process and delivery are fundamental to garner and retain Clients and customers. Any organisation should acknowledge that these are givens. They should be deep rooted in the ethos of any organisation. The competition is rife and unforgiving!

Then, there is also administration, finance, HR, production, distribution planning, activities and interruptions.

Let’s share a little secret – not one of the functions above would or should exist without a commensurate level of new or continual business. They are all irrelevant to achieving your goals and driving profitable business. The entrepreneurial challenges and goals aren’t served by these supporting functions.

They don’t add value to the 80% that matters.

Another symptom

In fact, it is frequently these functions that impede progress for a variety of reasons. The most common reason is the lack of purposeful processes that focus the organisation on its core strategy. Over time processes have a habit of consuming all the available time by growing sub-processes and overly complicating the business operation. More resources become necessary to manage tighter integration of the processes.

Invariably, the result is that the original purpose of a process is compromised and the level of busyness in managing the processes precludes a sanity check.

When unsure where to turn for resolution? How about learning from others who have successfully simplified and refocused their businesses? Like for instance:
Microsoft, BlackRock, Warner Brothers and Mercedes-Benz amongst many others. In this regard we have no hesitation in recommending the services and tools of Business Genetics, who operate on three continents.

AlternativeView

If you agree, read on. Your business health is fundamentally dependant on attracting new business (New Logos) and the continual business flow from existing Clients and customers. Your strategy should be to focus on that which really matters. We call this the entrepreneurial challenge. Some professions and trades naturally adopt a once-off transaction mentality. Others are able to develop an annuity model, whereby they achieve recurring income. P&L implosion will result in either scenario without the required level of sales results. The competition will eat your lunch and dinner. Even breakfast often becomes a luxury item.

In a new world of on-line marketing and sales many traditional businesses have been by-passed. Many have not grasped the reality of the entrepreneurial challenges in a globalised, on-line environment. Many if not most businesses are missing the vital components of the appropriate Marketing and purposeful Sales. These fundamental components should both be your responsibility, as a business owner. Your entrepreneurial challenge should be to attract the ideal Client, convert it, retain it and make a success of your mutual endeavours.

Without a clear understanding of how to translate a career, a novel idea or a unique initiative into a sustainable venture, it will result in considerable entrepreneurial challenges.

Let’s discuss how to obviate these challenges. Determining how to market is the first objective. The second action is how to sell.

Marketing

Marketing is a dark art, only understood by very few, practised by many who will drive your marketing budget into the sewer. The discipline of marketing is well understood in the B2C mass market environment, with above and below the line budgets. It is seldom nuanced for the various B2B situations, which require a far more precise and considered approach. The marketing professionals, with B2C experience and with limited B2B expertise will chew up your budget and produce limited results, adding to the entrepreneurial challenges.

The B2B situation is, by its very definition, a far more targeted and finite market. It requires a laser focused effort, juxtaposed to the spray and pray approach of the B2C world. Successful B2B brands have achieved a level of critical mass and renown. Their marketing budgets represent a minute portion of their revenues. They achieved their initial status in a different era. There were fewer competitors and the marketing landscape was sparse.

Start-ups and those who want to increase penetration and achieve growth have a fundamentally different challenge – balancing the marketing budget with the available funds and the no-guarantee perceived benefits (measured over a period). Now, there is more competition and increased competitive marketing exposure. The web and social media seem to have been monopolised by those that have already achieved a mature presence.

Try this

There is always word of mouth, which is foundational and is based on the essential components of quality and service. Which is how the established brands were born and thrived. Sufficient business growth can result purely from reputation. It is no guarantee for the astute business owner in the new world. Rome wasn’t built in a day. Clearly you have to start somewhere.

In the context of marketing, we offer some basic questions that every business owner should attempt to answer:

• What is your purpose?
• What problems do I solve?
• Whose problems do I solve?
• Have I identified these organisations?
• How do I reach them?
• How do I differentiate myself?

The Result

These questions are fundamental. They provide the roadmap to engage with the appropriate buyer. Applying the frank answers to your marketing approach will avoid unnecessary costs and effort. Each of these questions deserves critical thinking and guidance, which we provide elsewhere.

The purpose of these questions is to essentially define in your own mind and clearly articulate: Who do you serve?, How do you serve them and address their challenges?, What is your market segment?,Establish specificity on each and every target organisation, by name and location that you can help., How to approach them and articulate your Value Proposition. We cannot stress these aspects of your thinking enough. Critical thinking and analysis provide meaning, purpose and direction. The alternative is confusion, vagueness and disappointment.

Unlike the B2C practitioners, you aren’t broadcasting to a wide world. You are rather focusing with laser precision on likely prospects.

Your answers will guide your prospecting efforts and shape your Sales Engagement approach.

Sales

You could be a lonely warrior, a small team of professionals, have hired a sales person or manage an entire sales team. You could be heading up a local agency for some international brand, manage a small or significant business or work out of the boot of your car. It doesn’t matter. The principles don’t vary. What is of import is that you know where you are going and that you know how to get there.

There lies the rub! Most organisations and individuals waste an enormous amount of time and effort to secure profitable business; and often secure little. The cause is that they haven’t been exposed to a disciplined approach and a way to improve their fortunes and futures. Their engagement approach is unstructured and lacks purpose. Therefore – they lack a Sales Methodology.

“80% of your sales team is only achieving 42% of its target”

HR Chally

Sales Methodology to address the Entrepreneurial Challenges

The essence and purpose of a Sales Methodology is to:

• Empower the Sales Team
• Provide reality, not wishful thinking
• Equip you with a engagement guide and roadmap
• Avoid uncertainties in the Sales Forecast in favour of credibility and accuracy
• Distinguish between the contents of the Sales Pipeline and that of the Sales Forecast
• Establish a common and mutually understood terminology
• Provide the catalyst for critical thinking
• Develop professional engagement practices
• Establish a credible mechanism to neutralise the competition
• Promote the acquisition and retention of quality Clients
• Avoid wasted effort, wasted valuable selling time and unnecessary resource allocation
• Focus your efforts on real Opportunities – doing what matters
• Identify potential opportunities for diversification and innovation
• Produce increased individual and organisational confidence in the engagement process

A Sales Methodology has amongst others one vital constituent. This is the essential discipline and judgement to qualify Opportunities and to progress or dispense with these, expediently. Like any other disciple it should be based on a process, principles and be practicable.

Summary

Entrepreneurship is a tough calling that requires undivided dedication and the support of the organisation. It demands structure, process, judgement and meticulous execution. Above all, it must be supported by a commensurate level of sales volume.

It is your task to develop your Strategy to provide guidance to your reports. In particular your Sales Leader. We have provided sufficient guidance on this topic. We do offer the aQuity Sales Methodology, which has been honed over the decades. Included is our robust Opportunity Management framework, which strengthens the sales process. In support of this and to apply the framework in practice, we offer the aQuity OM app. We wish you every success in facing the Entrepreneurial Challenges.

After 50 years of experience in sales, management, research, and testing, we’ve developed a practical and effective Sales Methodology. We expand on this topic in the ‘B2B or Not to B…‘ eBook. As well its offspring – the aQuity Opportunity Management app. If this piques your interest, as it should to address your entrepreneurial challenge, then please visit the links in this paragraph.

Good business practice and common sense presupposes that the Sales Methodology forms part of the Sales Strategy for your organisation. This is the HOW? you will sell, approach the market and ensure a steady and sustainable business stream. The eBook devotes some chapters to this essential topic.