When meeting with prospective new clients for the first time and discussing their business, the phrase “I really need more sales” is one that I hear frequently from business owners. From my experience however, the need for more sales is often a symptom of issues elsewhere within the business. Most often upon analysis it is determined that what’s actually required isn’t more sales per se but in fact more profit.
More sales do not necessarily equal more profit!
Let’s look at a real world example of this…
An IT support company has forty contracted clients and four technical personnel. Each technician can comfortably support ten clients (allowing for holidays, absences etc). Let’s imagine for a moment that they obtain one new client. They then have to recruit and employ a new technician, with all the upfront and ongoing costs that this entails. This increases their turnover but at the same time reduces their technical staff utilization therefore reducing profitability…
I’m certainly not suggesting that increased sales is a bad thing, simply that rather than focusing solely on increasing sales volumes, some effort should be expended in developing new strategies to increase profitability.
If you would like to learn more about how to increase profitability, we would be delighted to meet you for a no obligation discussion.
I would welcome your questions / comments,
Andy Salmon.
