If I had a buck for every small company that can’t get past three million in sales revenue I’d be a rich man. Here’s the scenario. A bright engineer, creative genius, entrepreneur or wunderkind builds a product or creates an idea, markets it and business takes off.
Here’s the second part of the scenario. Our creative genius is now CEO of this bustling $1.5M company. They’ve moved into their second building and have plenty of space to build out when future growth occurs. Mr. or Mrs. creative genius have been the main salesperson for the product, which means that their contacts and their contact’s contacts have bought into the product or service. In sales terminology this is known as “low hanging fruit”. Just as in the Garden of Eden, low hanging fruit can be dangerous. Adam and Eve found that out the hard way. (My hats off to both A & E; they taught the rest of us how to appreciate the word struggle!)
The third part of the scenario runs like this. Sales are running at $2.8M and they have been at that level for 18 months. The sales growth line looks like a road through the desert-flat with nothing in sight. The CEO isn’t panicky but he or she is scratching their head a little wondering why growth stopped. To everyone looking at this company the answer is simple but the CEO won’t see it unless they are lucky enough to have smart people around them and are willing to “listen” to advice from those who understand sales road bumps.
Like Eve, our CEO is a bit on the arrogant side. Sales is “easy” for them, just look at where they’re at. Arrogance and lack of sales growth go hand in hand, especially with small companies. The CEO has tapped out the low hanging fruit and does not know how to prospect or is flat out scared to pick up the 300 pound phone to make a cold call. Someone within the inner circle of the CEO will suggest hiring a salesperson or two. The CEO will slough that off like a snake shedding it’s skin. And this is one of the reasons why so many $3M dollar companies either stay at that number or slide backward into another failed start-up.
The solution is simple. Every one of these business owners has to understand their selling limitations after the low hanging fruit years. What’s the sin in admitting that creative genius’s may not be good at selling? The smart owner will begin to search for a salesperson who will take responsibility for prospecting and bringing in new business. This little story does not end there, unfortunately. Bringing a salesperson on is more than just hiring someone who says they know how to sell. Preparing the sales rep to be successful represents a huge part of whether they will be.
I’ll cover the back side of the scenario on the Monday Morning Manager.
The Final Thought: Take calculated risks.That is quite different from being rash. General George Patton