Yes you might say that is going to be impossible, but you must try.

Your business will depend on selling sales or services and you won’t be able to plan without some idea of how much you will sell month by month for the first year and then quarter on quarter for at least the next two years.

Firstly what basis have you got for your sales forecasting?

There may be published data for your type of goods or services. Secondly there may be results that you have of your past experience if you are already in business. Thirdly results from your own market research.

Once you have this information you need to find out what external influences may have an effect on these forecasts? Have economic changes had an effect, are there new regulations that might affect your sales or service?

You must now use your own judgment and that of your colleagues in using all the data to decide how much of the market you can penetrate and how quickly?

There are areas to consider

1. How well you have identified your market niche, and set your prices?
2. How good you are at reaching your customers and convince them of the benefits they will gain from your unique selling point?
3. How much you will be taken off course by unexpected activity from competitors or other factors?

This can have a huge effect those companies who have a few larger contracts which if only one are lost could have a major impact on the business.

]]> http://thistime-nextyear.com/news/uncategorized/forecasting-your-sales-acurately/feed/ 0 http://thistime-nextyear.com/news/uncategorized/the-right-people-are-priceless-but-the-wrong-ones-can-be-costly/ http://thistime-nextyear.com/news/uncategorized/the-right-people-are-priceless-but-the-wrong-ones-can-be-costly/#comments Fri, 07 Jan 2011 10:49:00 +0000 Kathryn http://thistime-nextyear.com/news/?p=139

Yes it’s true. By getting the right person, not only with the skills required but also the correct drive and attitude.

However, experience has proved expensive by employing ‘experienced’ sales people who apparently have a track record in sales but when it comes down to the clear light of day are absolutely useless.

One such sales person caused the management horrendous headaches by quoting projects way less than required. In fact one such individual quoted £8k under the actual cost of the project. This meant that the company had to find this amount of money out of other projects just to break even.

This is the main reason that This Time Next Year was created. It is amazing how many times when quoting for projects small costs are omitted – it may only be £50 here and there but it all adds up.

The system allows for forecast and actual comparisons so the same mistake doesn’t happen again in the future – see an example :

http://thistime-nextyear.com/project/263/1/1/

I have had many ‘discussions’ about the fact that sales people should be aware of the impact that their actions take within an organisation. I have been told on many occasions that sales people don’t know the cost of elements – well in my view they should do, how can they make that decision on offering reductions or giving discounts if they aren’t aware what this mean to the business. A  rash 10% discount could turn a profit into loss !!!

The quality of customer service management is dependant on a number of key elements.

Mainly

• Products – or services which must be of  a quality which offers true value for money

• Premises – or an environment which creates a positive customer attitude

• Procedures - or systems which are customer friendly and deisgned to help with Customer Satisfaction

• People – to deliver the promise in an effective way

However people are the most important element in the whole equation .

Sales people need management, motivation and control.

They need recognition of a job well done and this develops a sense of achievement.

It is relatively easy to see when a sales person is not working well but it is more difficult to find out why he or she is not.

Be sympathetic and try and find out the reasons for the lack or decrease in performance.

It can be a good idea to have a commission rate system based on performance but at the same time it should be linked to the security of a basic salary.

Sales and commission need to be set realistically. If either of these aren’t this could lead to lack of performance or selling inappropriately which in turn could lose you customers.

Incentivising sales people can also drive your business. However they have to be applicable to the individuals concerned. My experience stems back many years when working in conjunction with a large insurance company, globally based, who tried to incentivise each countries sales teams with the same items – differing cultures does not allow for this. I have also found that by incentivising with tangible items and including the whole family, especially the wife, in the process, has driven sales.

Don’t forget sales are the life blood of your business, without selling your product or service your business will not stay operational for very long

There are some basic pitfalls when selling

• Never promise what you can’t deliver
• Never let you customer see you have a problem
• Never be too pushy or aggressive as this can lose you a sales
• Never reduce a quotation without ensuring you understand the total effect this will have on the bottom line
• Never critisise your competitors- the attitude is ‘they are good but we are better’ or simply don’t mention them
• Never argue, turn the point round by asking questions
• Never, Never be late for an appointment without notifying your customer – if you don’t appreciate their time why should they yours!!

The main area for a sale being lost is in the closing process. For some reason the ‘closing’ question is not asked. Be positive ask for the sale – that is what you are there for!

Your sales force is the front line of your business and it’s their skills which will give you  a healthy number of contracts and sales.

Experience has shown that salespeople often feel they stand alone within an organisation but it is imperative that the management ensure that they are an integral part of the business.

Working in companies large and small I have experienced sales people who over promise customers leaving their colleagues and the business in turmoil.

Managers of businesses are often guilty of sending sales people out without the correct product knowledge and commission based sales people can often sell a product that is not suitable both resulting in dissatisfied customers

Selling is achieving and meeting your goals and therefore sales people must either have targets set by the business or the business empowering them to set their own.  Preparing your sale force properly is the most important as their actual presence as they need to project the right professional image.

Yes you have a great idea for a new business so where do you start?

First thing to do is review the process of planning and the elements of a business plan, and plan a programme of work.

There are so many elements to consider before embarking on a new venture. Things that appear straight forward often turn into nightmares if the proper planning is not in place.

We will be reviewing ,over the coming period, the top ten areas to consider.

We start with:-

Plan the Plan – decisions about this will allow you to consider what will be involved, how much detail you need and how the plan should be put together and presented. Consider the people who you will need to help you in putting the document together and enlist their support and most importantly DEFINE YOUR BUSINESS

Many years ago while working with a marketing agency as Financial Accountant it became apparent that there were issues with project costs and sales being married up.

Project quotations were never measured against the final invoice and the cost of the sale.

The result of this was the business was seeping money quite badly in some areas.

A new project ‘job bag’ system was instigated into the business which resulted in some horrendous findings.

Quotations were being raised by certain individuals and when the  cost was measured for many projects it was discovered that the business was losing money in some cases up to 50% .

Unfortunately, and this is my bone of contention, companies do not make sales people aware of the costs that are attributable to the sale. This can often be due to the fact that they do not want to share with their staff how much profit is made. This is my view is a false economy. If staff are aware of the consequences that losing money on projects can have on the business in general, changes can be made.

Businesses use the forecasting of sales and profit to plan, organise, implement and control their activities for a period of time.

The success of numerous activities depends on the accuracy of the forecast.

Over the years we have experienced sales people who have over exaggerated their forecast which in turn have left businesses in a total mess because they wait for long periods of time to measure results.

Historically businesses planned for short, medium and long term – which equated from one to longer than 5 years.

Today’s market place is so volatile that is important to forecast annually but measure on a monthly basis to ensure that the company is on track to achieve their goals. If changes are required they can be made rather than waiting until it is too late.

Sales teams used to measure their performance against sales turnover however moving forward it is important to measure on both sales and profit.