The Profit Equation

Lets Start with Sales

Introduction

If you are running your business, you have a fundamental responsibility to yourself, if no one else, to make it work.  Let’s face it, unless you are limitlessly wealthy; you need to make money.  So that is one reason you are doing it.  There could be others, but for now let’s just focus on the fundamental primary purpose of all businesses…

That’s right…

To make money!

So from a purely tactical perspective, you have to “make a number”.  So the first step is figuring out what is your goal; what’s the target.  So lets get tactical.  But lets stsart sat the begoinning of the Profit Through Control Process. That is to say, lets start with Sales.

In sales there is an old adage … Calls + Demos = Sales

Think of it like you are training to get fit. How many leads sare you getting? Are you turning them into meetings? What is your tatget for meetings each week? For example, do you hsve a goal of meeting 3 to 5 new people per weekl? How are you doing against that target?

Now follow the Key Contyrol Steps we discussed before.

Step 1

Statring with sales; when you look at your business, think in a process orientation starting with the customer through your organisation to the point where you deliver your product and service to the customer and get paid.

Now map that out.  No need to get fancy, use post it pads or something and get a “rough cut” of your key steps.

Step 2

Now think about each step in the process.  Let me use a simple example process.

1. Lead Generation
2. Sales or Closing Deals
3. Invoicing or Billing or Collecting Cash
4. Purchasing or Buying Stuff
5. Doing Things or Building Things or Holding Stock
6. Delivering Things

Step 3

Now that you have your key steps outlined ask yourself two questions:

1. What in these steps could I do better to enable me to get more customers?
2. What “clogs up” my money and keeps my money from getting into my pocket?

So for the first question it could be more leads or a better conversion rate in sales or spending less on overheads.  But don’t boil the ocean here! pick one!

Similarly for the second question it could be getting paid quicker.  The root cause of that problem could be getting your invoices out quicker or better credit control or different terms or better pricing.  Again only pick one!

Step 4

Limit yourself to 3 to 5 key areas to improve.  Measure them and be relentless at your pursuit of improvement!

When you’re done, circle back and do it again!