It’s one of the biggest frustrations in business. One month you’re busier than you’ve ever been, and the next month you’re wondering if you’ll make payroll. Why is it that so many businesses ride the “feast or famine” rollercoaster?

There are two main reasons why your sales might fluctuate in this way. One is externally imposed, and the other is internally imposed, but both can be managed successfully with a little planning.

Externally imposed sales fluctuations are driven by factors outside your direct control. For example, a roofing company often can’t do much work during the rainy months, while an umbrella retailer might find it hard to make sales during the dry months.

One solution to this problem is to expand your product or service offering. Your company may have skills that are transferable to a service that is needed in your naturally slower months. For example, in our area, winter is more of a rainy season, so a roofing company could become a roofing and drainage company. They could install drainage tiles and so forth when they can’t work on roofs. Similarly, the umbrella distributor could expand its product line to include products people need in the summer.

More often, however, sales fluctuate due to the owner’s focus of attention. These are your internally imposed fluctuations, and they happen something like this.

A web design company needs more sales, so the owner focuses all her attention on finding new business and aggressively ramps things up. That’s great; except that now she has so much work that she needs to refocus her attention on project management or she’ll risk falling behind. She works hard to get the work done, but when she finally looks up from her desk, she notices she’s out of work. So she jumps back on the sales train and digs up a bunch more work. And on it goes… the sales and production departments going back and forth from out of control busy, to sitting around with nothing to do, and back again. It’s an endless cycle that’s easy to get caught up in (we see it all the time), but it doesn’t have to work that way.

At Wardell, we manage this process using a simple, yet powerful, forward-looking sales tool. Here’s how it works.

Begin by tracking your sales process in detail. Using a spreadsheet (or your favorite sales-tracking software) track the number and dollar value of all your warm leads or sales quotes. Next, estimate a closing date for each potential sale. And finally, compare those numbers to your actual sales.

Over time, you’ll learned how many of your prospects are likely to turn into clients and when, including the potential dollar value of those sales… extremely powerful information.

Follow this simple formula, and you’ll be able to predict fairly accurately how much business is coming down the pipeline, months before you get there. If you don’t have enough prospects in the pipeline, you can do something about it before it’s too late. Conversely, if you have plenty of work coming up next month, you can either refocus your sales efforts on the following month, or prepare yourself for a busier month.

Either way, you’ll take charge of the sales rollercoaster and build a much more sustainable business.

Mark Wardell is President and Founder of Wardell Professional Development, a business consulting firm, focused on the unique needs of small/mid sized growth companies.

mailto:info@wardell.biz
http://www.wardell.biz

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