Most businesses have growth as a goal. But, to grow sustainably you need to understand how this growth will impact all areas of your business.
Who wouldn’t be thrilled at the prospect of gaining new clients and upping their exposure in the marketplace? It’s why you went into business in the first place – to sell your products or services to as many clients as possible and dominate the market. What could go wrong?
Pace yourself
While sales growth may be top-of-mind, the pace at which you grow is equally important. Sales growth doesn’t happen in isolation; as you sell more all other areas of the business feel the impact – from human resources to infrastructure, product and service quality, client experience and branding. The impact can be negative or positive. If carefully considered and adequately planned for, your growing sales will have a positive impact.
So, when do you know if your sales growth is negatively impacting the business? Here are some telling signs:
- You are unable to fulfil your orders timeously.
- Your clients complain that your service or product is inconsistent.
- You are unable to fulfil orders from clients because you do 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 like the typical challenges that entrepreneurs face when they are starting out. 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 for its product or service, but is ill-prepared to meet these demands. To stay on the top of the situation, you need to set sales targets and, more importantly, plan for potential growth when setting these targets.
How to plan for sales growth
► Does your business have the capital to fund anticipated sales growth? When setting sales targets, calculate how much of your product you will need to fulfil anticipated orders.
With this in mind, assess whether your business is in a position to fund this growth, or whether you need additional funding. Not having the funds needed to fulfil orders is a key challenge during growth periods. And, it leads to many other challenges, such as late deliveries, compromised quality, unfulfilled orders etc. The result? Potential reputational damage and a decline in brand credibility.
► Do you have the resources required to achieve your sales targets? Assess the resources you will need to meet your sales targets. These could include human resources, infrastructure, extra equipment, investment in your technology, etc.
► How will you ensure that quality and service are consistent? Your customers demand quality services or products that meet their expectations, consistently. To achieve this, you need quality control processes. All touchpoints are important here; from the moment the phone is first answered, or the order placed online, right up until when the product or service is delivered.
The process needs to be mapped out, documented and shared with your team – and your team must be able to follow the process through without your involvement. This is increasingly important as the business expands and more people, processes and activities are involved.
So, will your growth take your business to new heights, or will it damage its very foundations? The answer lies in the depth of your planning. So when set your sales target, be sure to put the necessary structures in place to help you achieve your planned-for growth.
