Monday, February 4, 2008

Selling Out of Trouble

Allow me to set the stage: a small business on the verge of becoming a medium-sized business is bleeding money. Bad management decisions and poor strategizing has led the company into a constant cash crunch. How do you get out?

A totally sales oriented company believes that they can solve all their problems by closing more sales. You see this in companies where the CEO comes from a sales background. But, just like the Horse from George Orwell's Animal Farm, the belief that working harder can lead to a positive outcome only leads to failure. Don't think for a moment I am not a fan of working hard, quite to the contrary. But I am bigger fan of working smarter.

In countless cases I have witnessed client companies that place the total burden on the sales department and their customer base. There are only so many times you can dip into that well before it starts to run dry. Your customers begin to feel like sheep that have been sheared too often and start looking for other vendors. Your sales staff becomes demoralized and despondent as they constantly try to hit a moving target of sales quotas. It is a recipe for disaster.

This is why it is important every once in a while to take a step back and examine how you do business. Study every step your company takes to get the job done. Try to spot inefficiencies, duplication of labor, unnecessary steps, silly expenses and highly repetitive tasks. Work with your employees to find a better way to work.

Don't listen to C-suite employees or Vice Presidents. Listen to the actual people doing the work in the trenches and you will be amazed at the solid solutions they can present. Let me put it another way. There are two ways to get anything: brute force or finesse. If you want someone to give you something, you can beat them up and take it or you can convince them to give it to you. Forcing your sales team to repeatedly go out and Sell, Sell, Sell because your company is hemorrhaging money, then you are using brute force.

But if you work you’re your employees to identify the source of the bleeding and work to stop it, you are using finesse to solve your problem. Any company that makes money by brute force will inevitably find itself in trouble. A minor shift in the economy, the loss of a major account or a product recall will be disastrous. But by adding a bit of finesse to how you make money, by maintaining a lean and thrifty company and by listening to those who know their jobs best, you can salvage any situation.
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