Business EssentialsSales

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Step 1

Your current business position

Sales are the lifeblood of your business. It may sound obvious, but without a steady flow of sales your business will struggle.

But before you think about ways to increase or improve sales, you’ll need to analyse and evaluate your current business position. Only when you fully know where you stand, and what your audience wants, will you be able to set out an effective business strategy and sales forecast.

Predicting the future – your sales forecast

What is a sales forecast?A sales forecast is an essential tool for managing your business. It is a month-by-month forecast of the level of sales you expect to achieve – usually over the next year.

Why is it useful?With this information, you can rapidly identify problems and opportunities – and, most importantly, do something about them.

How do I create a forecast?If you’re a new business, a combination of market research, competitor analysis and good judgement will help you predict the expected level of sales.

If you’ve been running your business for a while, the best way to set targets for next year is to base them on what you have achieved so far.

Once you have created your forecast you’ll need to calculate your likely conversion rate – the percentage chance of each sale happening. For example, how many customers will you need to contact in order to make each sale?

Step 2

To get started on your sales forecast, think about:

1. Howmanynewcustomersdoyougainandloseeachyear?

2. Theaveragevolumeofsalespercustomer

3. Seasonalvariations

4. Any‘assumptions’or‘variables’youneedtobuildintoyourforecast,suchasrelocation,priceincrease,productlaunch,short-termcashflowrestrictionandsoon

Buildinginthesevariationswillmakeyourforecastmorecredibleandflexible.Itwillalsohelpyoupreparefortheunexpected.

With a realistic sales forecast, it’s now time to think about what steps you can take to raise those conversion rates.

What you want vs what you can achieve.To achieve practical sales growth, it’s important to have specific goals in mind. They could include:

1. sell more of your existing products

2. sell improved, higher value products to your customers

3. sell a whole new product range to these customers

4. sell existing products to entirely new markets

5. sell an entirely new set of products for a new market

Notice that as you progress down the list each sales decision represents an increase in risk.

Once you’ve set targets for the coming year, it’s time to think about how you can actually achieve them.

Setting targets

Step 3

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Keeping your current customers

Even if you’re doing well, it’s a good idea to review your progress.

Existing customers.Before you start thinking about potential customers, you need to build an understanding of who you already sell to. Identify your key customers – those who bring in the highest profits to your business.

If you sell to individuals, you may find it useful to know their age, income and gender. Whereas if you sell to businesses, you may want to know their size, industry sector and suppliers.

A quick analysis.Look at your overall customer base. Break it into ‘segments’ – individual customer groups with distinct and different needs. Work out the financial benefits to your business of serving each segment.

With a bit of research, your most important customers will become clear. Now you’ll be able to consider strategies for maintaining business with these key clients.

Step 1Step 4

Finding new customers

Another avenue for growth is to find new customers. If you already have existing customers and have profiled those you sell to most, you can use this information to concentrate your efforts on people or businesses with similar profiles.

Sell the benefits.While you may want to talk about the features of your product or service, your customers will want to know how it will benefit them. And be prepared to convince any customer of the advantages of using your product or service.

Find your niche.It can be difficult to compete with big businesses in the marketplace so begin by targeting ‘niches’ – segments that are not being adequately served by you or your competitors. Don’t become too reliant on any one niche in case the market suddenly changes.

Reach new customers.You can sell direct and/or through an intermediary. With direct sales, you can contact a customer in a number of ways:

1. by post2. over the phone3. via email

A targeted mailing list can provide you with an immediate database of possible customers. Business Link can help you with this.

4. face-to-face

This is the more expensive option, but if you have a product that needs a fair degree of explanation this might be the only way to reach customers.

Step 5

99P7890

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99P7890

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250 g

Finding new customers

Who is buying? Getting in front of the right people.In general, there are three key people who you need to deal with if selling to a business:

• the influencer is a key user of the product, perhaps a manager of a department

• the specifier draws up the requirement, often led by the influencer

• a final decision maker has the authority to agree or veto a deal and to sign the cheque

Your aim will be to try to get to the final decision maker, but offending those lower down the chain, by not consulting them, might lose you that sale.

We’ve talked about how you can increase sales. But as the old adage goes, you need to speculate to accumulate. So now it’s time to work out what you can afford to invest.

The right balance.Your target for the coming year may be to increase sales by £50,000. The question is, how much will it cost you to achieve this?

To find the answer you’ll need to calculate how much time or money you need to commit and the percentage of successful sales this commitment will bring.

When it comes to forecasting cost and turnover, every minor detail is important. Prepare pessimistic as well as realistic budgets to allow for different outcomes.

Money coming in.Break down every projected sale by month or week if you can in terms of product type and whether or not that customer is current or potential. Also work out when the money will arrive to accurately forecast your cashflow. Remember to take into account market trends and changes in prices.

Think about…Where will your customers or turnover come from – word of mouth? Cold-calling? Emailing or via direct marketing and/or advertising?

Money going out.Break down all costs associated with your campaign. Include everything from the cost of marketing materials and sales salaries to commission structures and sales support.

Budgeting

Step 6

Sales plan

Step 7

It’s time to create your plan of action. A sales plan will provide a long-term vision for your company and a yardstick for your business performance.

Ultimately, you’ll need a strategic objective, so begin by asking yourself a few questions:

• What are your sales objectives in terms of month, territory and salesperson? A non-specific aim of getting more customers is not good enough. You need measurable objectives such as ‘an increase of sales by £50,000 at the end of quarter one’

• What are you going to focus on?

• What are you going to change?

• What practical steps can you take to achieve your intentions?

• What territories and targets are you going to give each salesperson or team?

You’ll also need to consider what resources are available to you.

What daily, weekly and monthly activities and results are needed to reach our targets?

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Ask for help

Step 8

You need to make sure that you’re on target to meet your goals. This requires an adequate sales reporting structure, which will include an analysis of monthly sales reports, response rates and sales costs in comparison to the return on investment.

There are lots of things to consider to sell successfully. A useful acronym to remember is AIDA:

But, if things aren’t going to plan, we’re always on hand to help you get things back on track. And, if you follow the approach suggested in this Essential guide, you should be well on the way to increased turnover.

You can get more detailed help on our website www.businesslink.gov.uk/east or call 08457 17 16 15 to speak to one of our advisers.

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If you would like this information in an alternative format or need assistance to access our services, please contact us on 08457 17 16 15 or email access@businesslinkeast.org.uk

Textphone users can dial direct on 01707 398390 and we welcome Typetalk calls

Business LinkInformation and Intelligence Centre4 Bishops Square Business Park Hatfield Hertfordshire AL10 9NE

Find your local Business Link office atwww.businesslink.gov.uk/east/officesTelephone: 08457 17 16 15Fax: 0845 607 6117Web: www.businesslink.gov.uk/east

Business Link services in the East of England are delivered by BusinessLink East and funded by the East of England Development Agency

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