Why You Shouldn’t Increase Your Sales Just Yet

Before you go off starting a new e-mail marketing campaign or some other effort to get more visitors and sales for your company, don’t you think we should take a minute or two and evaluate if you are ready for more business first.

Think about this from a different perspective. 

• Are you currently sitting around with time you do not have filled yet? 
• Are you already stressed or overwhelmed by your current tasks of operating your business? 
• If you are doing all you can to keep your business running; where we do have the time to take care of that additional 10% or 20% in business?

Everybody is very concerned about gaining additional sales but very few have thought about how they would handle the increased in business.  You only get one opportunity to make a good impression, how well are you servicing your existing business? 

Generally, most companies are not prepared for the increase in business that any marketing effort could provide.  Nor do most companies have people sitting around waiting for something to do.  In today’s environment, we have reduced size, increased workload, and expect more from ourselves, and our employees, just to stay in business.

Without operational efficiency or solid business processes, you risk losing the business that you just generated from your marketing effort.  This is a catch 22 for most companies; because you cannot add additional staff before you have business and you cannot service more customers without additional staff. Therefore, to begin with, you need to look at your existing business processes and review whether they work for you, they work efficiently, or they need to be improved.

You really need to analyze how much excess capacity you have currently, to be able to understand how much of a business increase you can handle well.  That begins with a process similar to what you would use for financial budgeting, but instead is related to time budgeting. In larger companies, it would we call "Capacity Planning" and it is critical to understand before you grow yourself out of business.

To understand how much additional business you can service, you first need to know what capacity you have. You can figure out that information by taking the total amount of hours you spend working, divide that into categories by type of activity and place that time in three broad categories.  These categories would be Revenue Generating, Service or Fulfillment, and Administrative & Maintenance.

To assist you with your review, let me provide a brief explanation of each:

Revenue Generating – These activities provide revenue for your company. Most will be some kind of Advertising, Marketing, Promotion or other effort that attracts attention to your company.

Service or Fulfillment  - Those activities done to provide the products or services that you have sold already. The service of the customer, the delivery of the product, or a combination of the two, that creates happy customers of your business.

Administrative & Maintenance – The operational side of your company that deals with back office stuff. Payroll, Bookkeeping, Purchasing, Inventory Management, and Errands are all part of this category of work.

Once you have the breakdown of your activity, you will be able to answer the following two questions:

What is the maximum amount of business you can do in your current situation?

Where are the limiting factors contributing to that maximum?

Now, you can really begin to assess whether it makes sense to increase your business by doing marketing and advertising. If you find that your limitations will prevent you from servicing and maintaining the newly found business; then you would be wise to correct those limitations before you expend time, effort and money to attracting any new business.

You may find that you have the capacity to service new business and should also have a sense about how much capacity you can fill. This will help you to determine if, and how much, marketing and advertising to do. You may find that it would be better to limit growth to a small amount to ensure service levels do not drop and you able to maintain the new business properly. Ask yourself, "What would happen if sales doubled next week?" Would your current capacity handle that?

As stated on many occasions and throughout history; "You only have one chance to make a good first impression." All of your efforts in marketing and advertising would be lost if the limitations of your business cannot properly support and service the increase in business. You might even do more damage than good to your company’s reputation.