IBA, as the premier business brokerage firm in the Pacific Northwest, is firmly established as a respected professional service firm in the legal, accounting, banking, mergers & acquisitions, real estate, and financial planning communities. Periodically, we will post guest blogs from professionals with knowledge to share for the good of owners of privately held companies & family owned businesses. The following blog article has been provided by Jason Cutter of the Cutter Consulting Group (www.CutterConsultingGroup.com):
How to Take Your Company from 7 Figures to 8 Figures in Revenue as an Entrepreneur
“What got us here, won’t get us there.”
Every business will go through cycles of growth, sometimes rapid, exponential growth, and then hit a plateau. A ceiling. Might feel more like a wall. Where no matter what the current team, leadership, and marketing does the results just won’t keep scaling up.
What causes this? What can you do about it?
First let’s examine what causes it. Your sales operation is made of people and processes, built around a framework. Most of the time, in the beginning and up to a certain point I see a lot of sales ops that are thrown together. The central focus is getting salespeople who know how to sell and probably come from your industry. You are putting your faith in their ability to sell without a lot of guidance.
Then you added in some sales enablement technology around them and started putting effort into marketing. You have sales and revenue reports and some level of KPIs that you are tracking.
But none of that has yet to lead to an efficient, effective, and continuously growing sales operation. I have seen companies generating $10, 20, 40 million a year that are still relying on spreadsheets and don’t have a CRM. I cannot count how many companies I have examined that do not know their cost to acquire a new customer or don’t realize that their salespeople are winning but the company is not.
There comes a point where things have to change so that things can change. To get different and/or greater results it takes looking at your sales operation and identifying what needs to change to get those results.
There is a good chance that the revenue leadership you have in place doesn’t have the experience and mindset for the next level of what is needed. It’s possible that your salespeople won’t be able to adjust. Your technology, tools, and processes will need to be changed.
It’s like you have been living in a 2-bedroom house, but now that your family is starting to have children it’s obvious that you have outgrown that starter home. You can either start adding on rooms, or look for a new, bigger house. Both require effort, change, and new furniture.
To help you with identifying what to examine first, until you bring on some help, here is a list of the categories to focus on (listed in order of priority, based on my experiences with bringing the greatest results):
- Do you have a very clear and integrated mission, vision, and core values? A strong company culture will provide both the foundation for why the team is all there and the destination for where you are all headed. Without it change management is nearly impossible to execute.
- Is the compensation plan and job description set up in a way where the company wins when the salespeople play by the rules that have been set up? Your goals for the salespeople and the KPIs for them to achieve it should benefit the company, resulting in a benefit to them. Most companies just say “close deals and you will make money” but end up with unprofitable sales and more cancels/refunds than you desired.
- Is your recruiting process, questions, and filters set up to identify the right people for your organization? Do you know what “right” looks like? Most companies look at sales and industry experience and wrongly think that will lead to ideal results. But that is not enough – you need to build a way to identify for culture fit as well as open and curious growth mindsets.
- Is your training all about product? I am guessing it is, because most companies think that if they hire someone who knows how to sell, teach them what they are about to start selling, that it will lead to success. That would be like recruiting a good player to your team, showing them the playbook you run, then never focusing on practice, drills, etc. Training on selling effectiveness is as important (and of course, I think more important) as product training.
- Do you develop your leaders? Did you take a good salesperson and promote them, or recruit an external leader and assume they would know how to lead? Most likely you did because that’s what most companies do. Determine what would help your leaders – at all levels – and start providing them training, coaching, and mentorship.
- How is your team managing their pipeline from prospect, to lead, to closed deal? How are you managing their pipeline? Are they making all their needed follow up calls? Do you have tracking and reporting on everything such that you can easily identify where the holes in the bucket are? So many companies put in a CRM but don’t leverage it fully and so no matter how fast you pour water into the bucket (leads) it just falls out the bottom.
When you focus on answering those six sets of questions and filling in those categories of your sales operation, you will start to break through your revenue plateau and get to higher levels. These are not the magic bullets a lot of leaders are hoping for but it will make a big difference if you put the effort into these areas. Then from there you will start to identify other gaps that you can fill and leverage for growth.
If you have questions relating to the content of this article or finding ways to help your sales team improve their effectiveness, Jason Cutter would welcome the opportunity to answer them. Mr. Cutter can be reached at (206) 234-1848 and jason@cutterconsultinggroup.com.
IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, real estate, accounting, legal, and financial planning communities on subjects relevant to the purchase & sale of privately held companies and family-owned businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.