Many entrepreneurs get very thrilled by the prospect of gaining new clients and receiving more attention from their market. The thought of meeting and exceeding sales targets is something that all entrepreneurs want to experience in their businesses. This is why we start the business in the first place; to sell our products or services to as many of our clients as we possibly can in our market. By doing this, our business is growing, our return on investment is increasing, our market share is expanding and our profitability escalations. The focus is usually on getting the product or service to the market and ensuring that the business offering is known and continuous to be recognized in the market.
Growth in sales is the one key thing on every entrepreneur’s mind and the reason the business is started in the first place. However the pace of your growth is just as important as the growth itself. This is key because sales growth doesn’t happen in isolation, as you achieve sales growth, human resources, infrastructure, product or service quality, client experience, branding are all impacted. These can either be impacted negatively or positively. When taking careful consideration and the growth is adequately planned for; the growth process may have a positive impact of all these key areas in the business. For instance, if we take product or service quality, as you achieve planned growth; you are able to improve the product quality and implement new innovations that can further enhance the service offering as well as the customer experience.
So, when do you know if your sales growth is negatively impacting the business? The following are usually telling signs:
- You are unable to fulfil your orders timeously. So when your clients place orders from you, you do not deliver on time as promised to your clients
- Your clients complain that your service or product is inconsistent
- You are unable to fulfil orders from clients because you may not have the cash flow to pay your suppliers
- You have a high staff turnover; staff members resign due to being overworked and unable to meet their targets
Some of these signs sound very similar to the typical challenges that entrepreneurs face when they are starting out their businesses. Although that is the case; overtrading is experienced when a business grows too quickly and due to this fast growth, it is unable to cope with the demands that stem from this growth. This happens when the business receives incredible demands from its market, but it is ill prepared for these demands. It is important to set sales targets and even more important to plan for the potential growth that the business will experience as a result of this growth.
The following needs to be taken into consideration when you plan for your sales growth:
- Does your business have the capital to fund the sales growth that you are anticipating to achieve? When you set your sales targets; you need to calculate how much you will need in order to fulfil those anticipated sales orders; once you know how much you need you will have to assess whether your business is in a position to fund that growth or whether you need to source that money from other parties. This is one of the pitfalls of growth, where a business does not have the funds available to fulfil its orders. It is usually the source of many other challenges, such as late deliveries of orders, compromised quality of product, unfulfilled orders etc. all leading up to reputational damage and decline in brand credibility. So the first thing you need to do to plan for sales growth is to calculate how much your business will require in order to achieve its targeted sale.
- Does your business have the resources required to achieve the sales targets required? You would also need to assess and acquire the resources that will be required to enable you to achieve your sales targets successfully. This may include human resources, infrastructure, the extra equipment you many need etc. For example if you are running a coffee shop and you are planning to sky rocket your sales: will the current shop be sufficient to occupy all your potential customers, will the cash registers you use be enough for the orders you are anticipating, will the current coffee machines be able to fulfil the orders you are expecting. Therefore you will need to anticipate the resource demand that will come about as a result of the anticipated sales demands
- How will your business ensure that the quality or service it offers remains consistent as demand increases? Clients want to be assured that the service or product they buy is of good quality, it meets their expectations and most importantly there are no inconsistencies. This can be achieved by having processes in place which will ensure that quality control is taken into consideration when delivering to clients. All processes are important in this regard; from the time the phone is answered right until the time when the product or service is delivered. The process needs to be mapped out and documented and shared with the rest of the staff members, so that it is not only dependent on the entrepreneur to execute. This becomes increasingly important as the business expands and more people, processes and activities are involved in ensuring the product or service is delivered according to the client’s expectations. What is key here, is ensuring that you consider the additional processes that may be required when in order to achieve positive sales growth.
Every business wants to achieve growth; however, every entrepreneur needs to consider and assess the impact of this anticipated growth. Whether it will contribute to ensuring that the business moves to newfound levels or whether it results in the detrimental damage to the business. This all depends on how well you plan for your sales growth, so when set the sales target for the business; you should be able to establish the right structures to enable you achieve them successfully whilst ensuring that the business remain sustainable.
