Growing Your Business in Difficult Times - Sales and Marketing

The two most effective growth strategies we are seeing at this time are increasing sales and marketing budgets and acquiring weaker competitors. Often the two go hand-in-hand since the owner of the smaller company often becomes a salesperson for the acquirer. This month I will touch on sales and marketing. Next month, acquisitions.

Increasing Sales and Marketing - getting an early jump on sales and marketing in order to gain market share is a proven way to grow your business as the economy restarts. At the bottom of a recession businesses and consumers stop buying anything except essentials. Even essentials are often cut back.

For instance an industrial equipment servicing firm we work with has seen repair orders slow down. They are finding that often the client will have two or three machines that need repairs in addition to the one they have been called to fix. As demand picks up all of these machines will have to be serviced and then eventually replaced.

Getting in front of these prospects early (but not too early) will lead to more sales and sales growth. Remember in all your sales efforts that the initial need is usually created because of pain. Without pain your biggest competitor, “doing nothing” is hard to overcome. Once there is pain you must focus on how your product or service provides the most value to overcome the pain and then contribute to the future of the organization. That is not the same as lowest price. If it was lowest price everyone would have Walmart watches on their wrists for $4.99 or less.

If you are in sales (or are an owner doing sales) and have never taken a sales course, do so quickly. There is a defined process to find pain, qualify, create value, and generate profitable sales.

One other thought. Recently I attended a seminar on fast growing consulting firms. The data all supported that narrow / deep niche players expanded quicker and had higher profits than generalists. While it is logical that being a generalist and not letting anything out of the net seems like the fastest way to grow data does not support that.

As an owner/manager the most important thing you can do in the sales arena is provide training and manage the process. Managing the process means understanding and tracking your pipeline. For instance if you sell consulting and a typical sales cycle is 3 months, what activities should be happening at 1 month and 2 months to indicate that a pipeline is being built.

How can you apply statistics to track your salespeople’s progress? Perhaps you generally have a meeting to perform a needs analysis a week after the introductory phone call. How many of those meetings occurred last week? By tracking statistics and then managing your marketing and sales staff you can manage your sales progress and know what to expect. More importantly you can reduce spending or change course if the current programs are not producing.

Increasing your sales and marketing efforts is a very important way to grow.

Merger and Acquisition Strategy Checklists for Rapid Growth

Buying growth is an effective way to rapidly expand your business. It works best when both financial and human capital is carefully evaluated and transition integration is planned in advance and implemented rapidly.

Acquisition Strategy Checklist – Can You Answer These Questions?

• What is your ultimate goal and plan?
• Why are you buying a company? Will this provide new markets, new product lines, intellectual property, quality organization and systems, key people?
• What criteria should you use for a search?
• How will you find prospects?
• Who will manage or oversee the process?
• What are your strongest “selling” points to a prospect – high price, more cash at closing, great growth opportunity we can share, remove administrative burden, etc.?
• What is our pricing and negotiation model?

Preliminary Underwriting of an Acquisition Checklist

• Why will their customers stay and transfer?
• What assurances do you have the key people will stay?
• What real risks are you missing?
• Are the company cultures the same or will they assimilate?
• Do you intend to have two units or merge into one?• How will you effectively and quickly integrate people, technology, production, etc.
• Does the financial information make sense? Do the price and terms make sense?
• Where is the synergy that will produce very high returns justifying the effort and risk?

Deal Negotiation Factors Checklist

• Have you performed an effective search to flesh out all suitable prospects?
• Are they under bank, balance sheet, or other forms of duress?
• Do you have any competitors in the hunt?
• Why might they want to be owned by you besides money?
• What is motivating their wanting to do the deal?
• What will they absolutely not do?
• Can you improve income tax outcomes and/or liability issues and renegotiate if necessary to gain the savings?
• Are we talking terms or cash and what is cash worth if it is available?
• Honestly – have you become emotionally caught up in winning or does this company meet your strategy goals?

Gregory Caruso, Harvest Associates, www.harvestassociates.com