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Are you ever Frustrated, Stressed or Tired about Finances?
Sales can, and often is, all consuming for the business owner. After all, if there is no revenue coming in the door, there is no business of which to speak. And often, the business owner is their company’s best salesperson. When the operational, strategic and administrative demands of the business become overwhelming, the business owner must begin to analyze their role and determine just how much time they can afford to, and need to, spend on sales functions in their company.
Sales can be delegated. However, you must provide clear direction as to how sales efforts should be focused so the company will grow profitably and the way you want it to grow. Knowing the business as well as you do as the owner, you make hundreds of decisions every day. Anyone to whom you delegate this critical function does not have the same thought processes you do and therefore must be given specific direction. The sales function does not benefit the business when we sell anything and everything, at any price, because there is a customer out there who will buy it.
Determining your sales focus can be more difficult than it sounds. You may like to sell certain products. You may like certain customers better. You may like to have a whole array of products to offer, even if selling this collection of products doesn’t make you profitable. You may feel like there are certain products you must offer because others in the industry do, your customers expect it or it’s been done that way for a long time.
If you decide to delegate some or all of the sales, you must attempt to capture the key components of your approach and the thought process that goes into the many decision processes you use to be the company’s best salesperson. Then determine how best to pass those on in order to delegate sales, whether it is to an employee, a subcontractor or other outside source.
Determine your sales focus. Price the products right. Determine the best use of your time as the owner. Figure out what makes you successful. And create the best sales system for your company – all resulting in a focused and effective sales effort!
Once you do bring in those sales, then the challenge arises of making sure there is cash in the bank when you need it…
So, what’s so scary about cash flow? Most of the time when I procrastinate on paying the bills, I wonder “why did I put this off…I feel so much better with a plan!” The unknown is sometimes very frightening. So clarifying what is known and unknown in a financial plan is a stress reliever! Using a simple spreadsheet does wonders for my nerves. I can dream all I want but the bottom line is to ask “how much do I need to survive this month’s bills, next quarter’s taxes, this year’s bonus checks?”
Start at the top of the Income Statement and work down, then across. Make reasonable assumptions based on company history and on industry standards. If the company history is unclear, just start with something and refine it as you go. Identify how much you would like to make in order to do what you want to do. After all, this is one reason why you choose to be in business. Then back off to say, “where am I now and what is the gap in cash required?” Lastly, evaluate the priorities on where to earn money, where to spend it, and how to save for a weekend in the Bahamas. Look at a few variables…things like sales price, sales volume, gross profit margin, operating expenses, collection days, payable days, and breakeven. Plan for third party financing even though you don’t really want to go that route if you don’t have to. You want to earn enough to pay your way, right?
When you own a business, the buck stops where? It stops with you, the owner. If you have any employees, they depend on you to pay their bills. That is a lot of pressure, so fooling around with numbers is often a dreaded chore. There is no payroll check deposited to your checking account, other than the one you write.
So, let’s get over the fear of the numbers to figure out where we are going before we get there.
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Bridget DiCello is a business coach and the founder of AEP and facilitates business owner peer groups designed to exponentially increase the success of the members. Anita develops business proposals to obtain bank and other financing, has owned a consulting firm since 2000 and has operated MO’s Coffeehouse since 2003. Bridget and Anita will present a dynamic seminar focused on small business owners who run successful businesses, who wish to Focus their Sales Effort and Manage their Cash Flow. Friday, March 28th, 7:30 – 11am. Email Bridget@GoAEP.com or call 628-3207 for more information.
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