October 25th, 2009 17:00 EST
Running or owning a company is not an easy task. The pressure to perform is intense. Payrolls and profits have to be met and satisfied. People have to be hired and treated well. And an overall air of dynamic energy has to be created. For some folks the running a business " learning curve can be quite emotional.
About a year ago, a friend of mine, along with a group of other investors, purchased a sizable company and she became the CEO. The organization is national in scope and reputation, has existing clients, an experienced and trustworthy workforce and, when she bought it, had a significant cash flow.
The company`s focus is in the financial consulting area. Its clients are secured through contracts running anywhere from a few months to a few years. They are paid well in exchange for making and/or saving their clients substantial sums of money.
With approximately seventy-five contracts in place at the time the company was secured by my friend, she found herself overseeing a staff of about one hundred and monitoring some hefty deals. But it wasn`t long before cracks began to appear in the organization`s foundation. Unbeknownst to my friend (we`ll call her Kelly for the sake of this article), the company who previously owned her organization had not supported it with any sizable sales or marketing effort.
Two months after assuming control and with a few contracts at their termination point, she began to realize that there had not been (and was not currently) a sustained sales effort to secure new contracts. The existing staff was viewed as the first line of salespeople. However, these folks were consultants and not a professional sales staff. Everyone was told to look for opportunities within the existing client base or search out other prospects. One problem "none of them knew how to do that.
A marketing firm was hired. They were supposedly familiar with the industry, which according to my friend seemed like a good reason to retain them. After several months of having them on board it became obvious that they talked a good game but their work was not creative, their ad copy was abysmal, the design of collateral materials was confusing and their understanding of the business was certainly outweighed by their inability to market and communicate the expertise of Kelly`s firm to the industry.
My friend had one other situation that she forgot to recognize. She had never run a company of any size. She had been a supporting senior executive throughout much of her career. And there`s a difference between being a senior executive and being an entrepreneurial CEO. Too many people stood between the folks trying to sell, including individuals brought on board as salespeople, and those who should have been putting the process together and monitoring it. A middle management layer was firmly in place in a company that didn`t need any, or at best very few, people in the middle. Of course she was used to a large middle management staff in her previous corporate life so she built the same in her new life.
Worse yet, there was no strategic sales plan. A catch as catch can atmosphere was created, with an overriding air of tension and pressure. Those who were given the responsibility to sell (and the responsibilities were shifted continually) were told different strategies on different days. Rather then mining existing clients, dividing prospects into areas or regions, building long tern relationships, networking effectively and efficiently and asking for referrals, she would walk around the office and/or call her salespeople " on the phone and ask, Are there any sales yet? " without consistent and specific guidelines as to how to get prospects and close them.
Since she had never been in the type of business she now found herself, she also didn`t take the time to research the average sales cycle. If she would have, she may have realized that it took, on average, eight to twelve months to close a sale. This would have saved her and her employees quite a bit of anxiety and anguish.
All was not lost however. Kelly woke up one day (after much advice from friends and advisors) and decided to rearrange the sales process. Those who were good at networking were to concentrate solely on that. People with a large referral base were to work their contacts extensively. Existing and previous clients became the responsibility of two people with delineations as who did what. The marketing folks were let go. Middle management ranks were trimmed. And sales training was put in place for the folks in the field.
A retreat was scheduled so that everyone could be given a clear understanding about the new direction of the company. Kelly also realized that if she didn`t put herself out as the face of the company she was missing a chance to network with other CEO`s and decision makers. And she also resigned herself to a realistic view of the sales cycle.
Armed with her new energy the company has begun to turn around, but not without cost, both hard and soft. New investment dollars had to be, and were, raised and new projections devised. More realistic goals were set and more proficient employees hired.
The job of attaining new contracts is daunting, but some how I have the feeling that Kelly and her reshaped company is up to the task.
To avoid costly problems:
Have a clear and distinct method for keeping your pipeline filled
Train your employees to optimize their abilities as well as learn new skills
Check out any consultants, advisors, and/or 1099 firms or individuals you engage. Get references.
Realistically assess your strengths and weaknesses.
Assign responsibilities and accountabilities within the framework of well-defined processes.
Know what the average sales cycle is for your product and/or service
Dan Goldberg is a keynote speaker and the President of Dan Goldberg Consulting, L.L.C. a training, coaching and business development firm located in the Philadelphia, PA area. He is the author of the book Lighten Up and Lead, " co-author (with Don Martin) of the book, The Entrepreneur`s Guide to Successful Leadership, " and author of The Six Steps To Solid Sales Success " and The Seven Elements of Successful Management " programs and the audio tape Growing A Successful Business ". You can contact him at email@example.com, visit his website at www.dangoldberg.com or reach him at (215) 233-5352
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