More Sales Is NOT Going To Save Your Business

There is an adage that says "nothing can't be solved if enough money is thrown at the problem". When it comes to growing your business you need capital to keep it going. But money alone, without looking at your whole business, is not going to save it.

A good business owner, once they have been in business a while, usually can see from the sales figures how much they can expect in profits. They have been running things smoothly and they know their business is fairly predictable.

But in today's business environment, that is not sustainable to maintain success. Any number of things can happen to drive business up or down. Take the most recent of crises, the pandemic.

A friend of mine, Jeff, owns a construction company that specializes in outdoor buildings. By the end of 2019, Jeff's business was going pretty well. People were buying his gazebos and pavilions. The business was growing. So at the end of 2019, Jeff splurged and spent a portion of his hard earned money.

But then the pandemic hit. His business was nearly gutted by March. Cash reserves were starting to look pretty grim. Orders were cancelled, refunds given, etc. Things didn't look so good. So Jeff doubled down.

He did everything he could to keep the sales he had and to try and bring in more business. And it worked. People were spending money on their houses instead of traveling. Jeff was in the right spot at the right time. He was booking orders left and right. By May he was sailing high. He was getting back to where he was and more.

The problem came to light when the lead time for building his projects started to get longer and longer. Jeff was booking orders but people were being laid off or unable to work at his suppliers. Pretty soon he started to have customers complain about the lead time. His good will that he built up was taking a hit.

Not only that, while he was trying to sell he was also trying to manage the projects, order material, schedule workers, finalize drawings and specs. Not only was the building work falling behind, the quotes were taking longer to send to prospects, some drawings didn't get to where they needed when they were needed.

Jeff was looking great on revenues but taking a hit on his reputation and on him physically. Jeff needed to get it together.

There are a lot of situations where more money, more revenue can help boost the business. But without looking at the strain it puts on your systems and processes, that increase in revenue can break your systems and put all of your processes on hold.

I see this happen to HVAC contractors in the summer and winter. People will call any HVAC contractor that has an appointment available when it is 100 degrees and the AC just went out. Sales are coming in the door at a rapid pace but you can't gear up your personnel fast enough to cover it.

So what do you do?

  • You start paying more and more overtime.
  • You pressure technicians to get done faster which usually takes a hit on quality.
  • Then when something goes wrong again, somebody needs to go back out and fix the problem created by quick work.
  • So when you thought you had a decent margin on that job, it just went into the dumpster and now it is costing you.

The real solution is leadership. You need to look at your whole business and when you see a change in revenue, either drastically up or down, you need to step back and take charge of the situation. But they don't teach leadership at trade school. You are left on your own to figure it out.

Here is what Jeff did - he took some time away from the phones and emails. He started calling around to other business friends to get advice. He found someone that he could work with to help him figure out how to get things back on track.

Jeff developed his leadership skills by identifying the work that he needed to do and work that could be done by someone else. He found some temporary help to manage all the paperwork and another person to help create processes providing better workflow to ensure that nothing was missed.

He hired a virtual assistant to take care of his website and online advertising. He hired sales people so that he could shift his time away from sales and into the business. Jeff knew that he needed to change and went about it with purpose and leadership.

There is another adage, the hardest person to change in your organization is you. So when you think that more sales will solve everything, think of Jeff and how his leadership needed to change to handle more sales.

QUESTION: What was your biggest takeaway from this story, or from this post? Please share your comments!

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