Sales revenue is the fuel for your business. The revenue from sales allows the business to generate profit, value, and ultimately freedom for business owners. Do you feel that you are not in control of your revenue from month to month?
Do you find your business waiting for the phone to ring, an order to arrive via email, or that next customer walking through your door? As business owners, we sometimes feel we are at the mercy of the market. What will it do? How will it affect us? We can all relate to feeling like we cannot control our future because we don’t control our revenue. It is something that we watch on a daily, weekly, or monthly basis. But what can we do to impact it?
The process known as ‘Business Development’ is proactively planning on obtaining business, implementing actions that can affect it, and implementing the proper sales process to obtain the sale. This is traditionally referred to as market research, sales forecasting, marketing, and sales. For businesses that execute projects, this would also include estimating. Business development could also include evaluating and launching new products or new markets. All these together should be aligned to produce the revenues needed to meet the growth and profitability goals of any company. Often, we find them separate, unorganized, and not focused, IF we even have them as a priority.
Most small business owners started or joined a company early in the business. Sometimes it was just you and a pickup truck with some tools and knowledge. In those early days, whether you knew it or not, you were doing business development.
We define business development as the planning, marketing, and sales of your products or services.
Meaning that is what you do in the early stages of all businesses. The problem is that once you sold something, you had to ‘produce’ the results you sold. There was not someone else to carry out fulfilling the order. The tension that this produced was either selling more than you could accomplish yourself or spending too much time producing, that you could not focus on selling your next gig. As you grew, you either found other people to ‘sell’ your product or service, or you found others to help ‘execute’ or fulfill your orders.
The problem most Founder-Owner’s face is figuring out at what point we need to quit ‘executing’ and focus on planning and strategy. This is the proverbial ‘working IN your business instead of working ON your business.’ A solid Business Development Plan significantly impacts your business growth and success.
But even after you have grown, hired Sales and Marketing staff, operations staff, and administrative staff, business development typically falls low on our priority list. There are many other ‘fires’ to put out or crisis to handle. This ‘spiral of death’ where every part of your business is in your hands, and you feel solely responsible for making it successful, is often the very cause of less than desirable sales, profitability, and growth. So, with that hard truth in mind, what are we to do?
As a popular motivational poster once said: ‘Though I can’t control the wind, I can adjust the sails.’ Or is that ‘adjust the sales?’
While we cannot control the economy or the markets we serve, we must take some time to understand them. How are our markets changing? What determines our sales volumes? It can be frustrating to watch actual sales fall below our forecast. While every single forecast is wrong, we need to understand major variations and trends compared to our forecast. Why are we consistently below or above our forecast? What are the reasons behind the variations? Has the market moved? Is there some disruptive force happening in our markets? Are we being outperformed by our competition? These questions should be understood as a part of establishing a business development plan. Understanding our current markets and trends is a good first step in any business development effort. Where are your current customers coming from? How do they find you? What research and decision process do they use to ultimately purchase from your company? Who are our best customers? How can we find more of them? Why are they buying from us instead of our competition? Are our customers loyal to our brand? How long or how many times do our customers buy from us? What is the percentage of ‘new’ and ‘repeat’ customers, and are they both increasing month over month?
These are essential questions that you need to answer for your business. Historical sales data, the customer journey, your unique selling proposition, competitive analysis, market segmentation analysis, and customer profiling are some of the tools that can be used to assess your current revenues and strategize how to grow them.
Once we understand our current customer base and have done some market evaluation, it is time to determine what products, services, or group of customers we want to address with our marketing messages. Through customer profiling, the customer journey, and other tools mentioned above, we begin to understand who our customers are, what process and medium they use to make purchasing decisions and differentiate our offering from our competition. This is known as ‘market messaging. ’What messages do we want to convey to our potential customers or a specific group of customers? How can we encourage or entice our customers to purchase our product or service? Traditional marketing strategies include Product, Positioning, Pricing, and Promotion.
Our marketing messaging should address the benefits of using our products or services, how our offering is ‘better’ than the alternatives, and what we are willing to do to get you to buy our product or service over other alternatives. Not so obvious, our Pricing sends a message of what we believe is our ‘value proposition’ to the customers. Do we want to be the ‘lowest price,’ the best ‘value’ or seen as a premium over the average alternatives? All these together form our market messaging. This is the foundation of any marketing program is to determine our ‘messaging’ before we decide what is the best medium to communicate the message.
If our customers are social media savvy, we might choose to use that media. If they require a lot of technical information, we may have a knowledgeable sales force to interact with potential customers. Our online presence is often a place with we need to make sure our website is consistent with our messaging and allows potential customers to find us, learn about our offering, and quickly and conveniently purchase our products or services. Once we have defined our markets, understand our customers and their buying habits, know which customers we are going after with our marketing, have our message clearly articulated, and chosen the appropriate method to reach them, then we can begin to implement these things that can impact our revenues.
A sales forecast without a plan is just a dream.
Simply ‘increasing sales by 10%’ is NOT a forecast or a plan. Basing the future on the past is rife with opportunities for failure to meet the forecast. The economy changes, the market changes, and the end-users change.
For some of us, the weather is a big factor. Who of us has figured out how to control that? Unless you are in a very mature market with very predictable growth, which is unlikely, the basis for your sales forecast needs to be based on something more than just past sales. Sales history can be a place to start, as it can often reflect the seasonality of your business and general growth trends. However, a good business plan includes actions that are intended to increase sales as a result. This may be a new marketing campaign, an additional salesperson, opening a new market, or launching new products. Each of these should be evaluated and tracked as to ‘how’ they impact sales. What actions do we plan to take that will positively affect our sales? A good sales revenue forecast starts with historical sales data and predicts the impact of the actions we plan to take, taking into consideration the anticipated changes in the economy and markets. It is important to mention that to know how your plans are progressing, you need to define a means to measure or track the results of your actions from the very beginning. As it becomes clearer which of your revenue growth strategies produce the most increases, you can ‘double down’ your marketing investments. This may involve increasing your investment in one strategy or perhaps moving the investments from underperforming strategies.
Once you have determined the markets you want to focus your growth, define your target market messaging strategy, prepared your desired sales forecast, it is time to evaluate how you close the sales. What channels do you use to obtain your forecast sales revenues? Are your customers the end-users or are they other businesses? (B2C & B2B) Do you focus on direct selling, where customers buy directly from you? Do you establish ‘manufacturer’s representatives’ who market and sell your product or services for a piece of the action? Do you use distributors or wholesalers to get your products or services to the end-users? Do you have a physical presence in one or more locations to offer your products or services? How do you structure your pricing, commissions, and promotions to best leverage your sales channels? The days of traveling salesmen are being replaced with many online and virtual alternatives. You should not get stuck in how you have always done it, or what worked last year.
Look for new and creative ways to sell your products. Does your industry have an association? Are there local or online ‘networking’ opportunities for you to offer your products or services? Each of these have their place and should be evaluated as a part of a good business development plan.
So, now that you have some tools to use in growing your revenue, you can start to communicate your plans, actions, and performance goals. This is what the result of a good Business Development Plan is intended to do. A good business plan has actionable strategies and plans, targeted market segments, and measurements to track progress towards sales revenue goals. You don’t have to be on the sidelines just watching your sales revenues. You can now do something to impact them. No matter what business you are in or what you are trying to achieve, taking planned steps towards your goals, making them visible, and measuring your progress is an absolute life-changer.