Scaling a Business is All About Sales
What do you suppose is the very first thing you should do every single day at work? Focus on sales, that’s what. The first three hours of every business day must be focused on sales (unless you have a sales team, and then it’s a 24/7 deal) to generate cash flow that can help safeguard your business against any kind of inclement weather. This is time spent strategizing with your sales team, reaching out, seeking referrals, following up on leads, setting up meetings, and so on. Rinse and repeat each and every day: sales, sales, and more sales! Remember, sales is sharing. If you truly believe you have the best product or service, get it into as many hands as possible.
Companies that are focused on revenue don’t struggle with cash flow as much as others. As the CEO of your company, you always have to be the chief convincing officer. You must stay on top of your numbers and your sales team. Everyone in your company must be focused on the sales target, including the marketing department and your assistant. The entire organization must know the number of leads it takes to convert a sale, so you can work together as a team and make that target.
Always focus on ways to generate sales and keep cash flow going. There are myriad ways to generate revenue to scale your business, including: leveraging; replicating yourself; hiring forward; upselling and cross-selling; getting customers to buy more; licensing; expanding globally; franchising; creating certification programs; and buying competitors. Find the ones that fit your model best and dive deeply with them on a daily basis.
Sales is all about conversions. Many times, companies will lump marketing and sales together. The truth is, they are two distinct aspects of your business. One drives the business to you, while the other converts it into a sale. This is a very important delineation because you might be spending a lot of money on marketing and driving traffic, but you’re not getting the conversion that warranted all of that expense. In the reverse, it’s possible you are getting plenty of conversions, but don’t have enough leads coming to your door. Both are equally as important.
How Much Do I Invest in Marketing?
When determining how much to invest in your marketing, you first must back up and determine your Customer Lifetime Value (CLTV), which is a prediction of the net profit attributed to the entire future relationship with your customer. Here is a simple formula:
Average value of a sale x number of repeat transactions x average retention time in months or years for a typical customer = CLTV
For instance, if your customer lifetime value is $3,000, and it costs you $500 to acquire that customer, then you will happily spend that $500. The point is, you’ll never know how to develop a solid marketing budget unless you know what the return on your investment needs to be. This knowledge is vital because it will help you make marketing decisions based on the reality of your own numbers, rather than the promises of some new media program.
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