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More sales isn't always the answer

Managing Money

4 min read

"I need more sales."

If I had a dime for every time I heard that from a client… Well, I’d probably have $20 by now. But seriously, the issue of sales (or lack thereof) comes up all the time; most often from clients who are just beginning the EMyth Coaching Program.

Really, what business couldn’t benefit from more revenues, more cash, and more stability? Business owners can very easily find themselves distracted by the lure of “more sales.”

Sometimes that is just what the business needs.  And sometimes, it just isn’t.

The reality is that more sales does not always equate to more money. Unfortunately, it’s just not as simple as that. As an EMyth Coach, I admit that I have the advantage of perspective, having worked with dozens of clients on this very issue. I’ve seen what works and what doesn’t and it’s my job to try to get the client to find the path that works. We start by digging a little deeper into what the client really needs, because oftentimes, the frustration they presume to be dealing with isn’t really the frustration that’s causing all the problems.

Let me give you an example.

One of my clients told me that she desperately needed more sales. She and her partner had been working really hard in the Mastery Program; they were developing systems, implementing innovations and cranking through the development of their business. But it wasn’t working—at least, it wasn’t turning into greater profit. In fact, they were working longer hours, spending more time worrying about cash flow and they were starting to lose control over the business as a whole. 

They were confident that the problem was the result of not enough sales. They wanted to discuss how they could ramp up their leads right away.

But when we explored their frustrations in greater detail, it became clear that it really wasn’t a sales issue they were facing. The reason they were spiraling out of control wasn’t because of a lack of intention…it was a lack of attention to the right aspect of their business. 

Instead of focusing on sales (or more specifically, their lead generation and lead conversion systems) we turned our attention to their financial management systems. They’d already started the financial quantification process, and were beginning to track the flow of information that arises in the normal course of business—invoices, purchase orders, cash register tapes, bank deposits, and lease payments—all of the things that captured the movement of money into and out of their business. But they’d yet to organize or analyze that information in any meaningful way. And when we did that, we found our answer.

They were working themselves into the ground not because they didn’t have enough sales, but because they simply weren’t profitable. And no matter how you slice it, more sales will not suddenly make you profitable.

More sales would only have increased their cash flow for a few days, and might have made it seem like they were doing better, but the long-term impact would have been devastating to their business. In fact, when we looked at the numbers, any significant increase in sales would have ruined them by the end of that quarter.

When in doubt, dig deeper

The bottom line is that the root of your business frustration is not always what and where you think it is. It’s important that you pull yourself out of a tactical reaction when confronting a challenge, and instead approach it strategically. Because every area of your business is connected, what you’re experiencing might merely be a symptom in one area (Lead Conversion for example) of your business, when the real cause of the problem is in a different area (Money).

Your business workout

Now, because I’m a Business Coach, I want you to get in a little business exercise.  I want you to practice this systemic thinking.  (When I say “systemic thinking,” I mean that I want you to think—from a strategic perspective—about how things are interconnected in your business.)

Here are three steps to follow when confronted with a problem in your business:

  • First explore the big picture. What is the real impact this frustration has on you, your employees, your customers and your business?
  • Then quantify anything and everything that might be a result of this situation. Whether its lost time, productivity, lost revenue... every frustration is ultimately costing you money.
  • Finally, keeping the first two steps in mind, observe the frustration objectively. Avoid blaming people, and instead, focus on the systems. Walk step-by-step through the sequence of events until you’re able to dissect what’s really going on. You’ll probably identify areas that can be improved with system implementation right away.

And here’s a bonus exercise, for those of you who really want to stretch your legs, so to speak. 

When you feel frustrated in your business, write it down in a notebook. Example entries may read, “Bob in Sales was late again today, missed an important customer telephone call," or “Shipping dept. didn't send package on time, customer didn't receive package as promised,” or “electrician mistake resulted in one-hour power outage.”  

After noting problems for a few weeks, go back and look at your notes and deal with them strategically. Common themes of frustration should emerge, such as multiple occurrences in one department, trouble on a given team, more problems on Tuesdays, more issues at 1pm, delivery problems when its raining, sales trouble at the beginning of each month, issues with particular clients, etc. etc.  If you can identify and analyze common elements, it will be easier to pinpoint what has to change. From there, you can develop some standard procedures to deal with those issues.

Team work helps

Once you have cultivated this skill within yourself, you can then teach this skill to everyone in your organization. Get them to track their frustrations.  Get them to see what isn’t working. Meet with them regularly to get them thinking about a system that could fix the underlying problem, and then hold them accountable for developing that system. Just imagine what your business could achieve if everyone, at every level of the business, could solve one frustration every month. Just one a month!

It’s a shift in thinking

Without this shift in thinking, you can expect your frustrations to keep popping up again and again. Remember: every frustration you have in your business is due to the lack of an effective system. With this perspective, you might discover that sometimes you need more sales. And sometimes, you’ll discover that what you really need is a solution to a much larger issue. 

EMyth Team

Written by EMyth Team

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