I had once noted that many startups strategize themselves right out of business because they don’t get stuff done! Sales may be one of the more daunting efforts you have to succeed at.
Many businesses fail. In fact, an estimated 80% of new businesses will fail within the first 18 months of their lifespan. Depressing, right?
But buck up, only those too dumb to know they should fail are the ones that succeed. The ones that get stuff done!
Sales is the lifeblood of any business. Without sales, you have no cash-flow, and without cash-flow, you're continually increasing your debt -- whichever line of credit you may have (whether a bank, your own savings, investment working capital, or friends and family).
Many businesses that fall on hard times look to slash overhead. Time and time again I see them cut their marketing budgets. No, wrong, increase marketing & sales and slash everything else -- without sales you don't have a business!
Sales have to be one of your highest ongoing priorities. But you need to also do your homework; what type of industry are you in; are you selling B2B or B2C, or both? Where are your potential customers accessible -- at networking events, online, via foot traffic, at associations, or on the golf course? Sales & marketing strategies vary from industry to industry: there is not a one for all template.
Question 1: where can I access potential customers? This will help define the strategy to deploy, then work up a budget around it.
A friend of mine recently wrote an article about a strategy of how to build a sales funnel -- to attract leads, establish your credentials, and then convert them into loyal customers. Depending on your business model, this might work for you.
But there are other considerations when you begin to develop a sales strategy. Every sales effort has a cost, regardless of whether you ride down the street in a car and take names to call by phone later, engage in tradeshows, take out print or digital ads, or build an entire inbound marketing plan.
Before you approach how to sell your product/ service, you have to build the costs into your overall budget. Also, determine if your sales strategy is scalable: if your sales activity increases and sales go up, do the costs go down in volume, or do they rise, accordingly or exponentially?
Margins also matter. Can you afford the marketing plan you've devised?
My first business survived and grew because we had a very high margin. It was the 1980s, long before the Internet when we did sales direct with potential clients, one on one, and/or, in some cases, got a referral. But event the referral would then require a costly meet.
We were in a high-cost industry as freight brokers, where we'd have to prepay our subcontracted trucking companies 50% of the total owed them before the shipment, then pay the balance usually 10 days after delivery. So when you're advancing $2,500 for a truckload that you're billing $3,000 for, but have to pay the entire $2,500 before you can bill the $3,000, and then wait 30 days for payment to you, you can see how cash intensive it is.
My company had very little cash when we launched, but we did so with one anchor account. Moreover, as we grew we focused on smaller LTL (less than truckload) shipments --while my competitors were focused on full truckloads (40,000 lbs.), 1/4 loads (10,000 lbs.) and 1/2 loads (20,000 lbs), we were handling shipments as small as 1,500 lbs.
My friendly competitors would scoff at my shipment of $250, when they were booking $700 up to $3,500. But what they failed to realize was that they were earning 10-15% per shipment while we were earning 40-150% on ours. And it was these high margins that financed our high-cost sales initiatives.