It might not be 20% of your time, but it will be at least that much if you want to have a continual source of revenue. One of the big problems you have when you run a small business is that there are dry spells of not having enough new business to service.
A very simple issue causes this problem. You haven’t been consistently selling your products or services. There’s no secret to creating a stream of new business. You just have to make enough sales calls and voila, new sales appear.
The easy part is knowing what you have to do. The hard part is knowing why it’s important. Here are 5 things to consider:
You’ll be able to meet your payroll.
I find this is one of the biggest worries of smaller businesses. If you employ less than 25 people there probably have been times when you were worried about having enough money to meet payroll.
This is not an unusual situation. Most smaller business owners I’ve talked with tell me that from time to time they are really worried about meeting payroll. Sometimes they even stop paying themselves.
This problem is always caused by new sales drying up. If you spend 20% of your time creating new business you’ll have enough business in your pipeline at all times. You might even get to stop worrying about not meeting payroll.
New customers are more profitable than old customers.
Old customers just don’t make you as much money as new customers do. Old customers often don’t have their prices increased. Old customers often aren’t getting leading edge projects. Old customers might start thinking of your products as commodities.
New customers will buy your latest and greatest. New customers will value what you do. New customers will often pay you more than old customers for the same products.
The trick is to not only get new customers, but to have your old customers think of you as a new supplier. This will help you keep all of your customers profitable.
You’ll be able to count on having enough customers to keep your doors open.
Customers go away. Sometimes they go out of business, sometimes they sell their businesses, and sometimes they decide they want to use a different supplier. If you don’t have a pipeline of new customers to replace the ones that go away you’re going to have less business.
If you spend 20% of your time scouting for new customers you probably won’t have to worry about losing the few that disappear. You must plan for some reduction in your customer base every year. If you don’t have a way to replace them, eventually you’re going to have problems with cash flow.
You’ll have created a strategy for creating new sales.
Working in sales is hard work. Most small companies just use brute force to get new business. They just make calls and hope that good things happen.
Marketing is the strategic side of sales. If you spend 20% of your time making sales calls you’re going to get tired of having doors slammed in your face. You’ll probably find ways to get better results. This is called marketing. Marketing is all about strategy. Spending time working on new business every week will automatically help make you a marketing whiz.
You’ll start to learn about the difference between sales and marketing.
Sales and marketing are two very different activities. Sales is all about tactics and marketing is all about strategy. I recommend that you first start spending your 20% of your time on marketing and then start selling.
Once you’ve put together strategies for selling, use those strategies for the 20% of your time you spend on sales. If you first plan how you’re going to be successful you’ll likely be more successful. It’s very simple, but few people actually start with marketing. You can be different and get better results just by making this change.
If you want your company to prosper you have to make sales and marketing part of your week, no matter how busy you get. I know that you’ll be tempted to put sales on the back burner when you get busy. If you do, just know that there will be a time when your business slows down. Is this something you want?
I’ve written a special report on strategic marketing for the private business owner. Too often we just sell and don’t think about the strategy for sales (marketing). To get this report, click on the button below.