The pointy end of the business

Sales give you money and cash flow. And cash flow gives you opportunities to hire, to expand, to grow.

Have you ever heard that sales is the pointy end of the business? Think about growth and how it accumulates. It starts with sales. To put that into further perspective, let’s think about all the ways you would grow your business with external channels: advertising, publicity, content, email, social media, speaking engagements, community building, direct sales, etc. The list goes on and on. Now draw three rings on a piece of paper like a bullseye. Put the channels you’re unsure about experimenting with in the outer ring. Put the channels you know work but still need testing in the middle ring. Put direct sales in the middle ring, the center. Now imagine that’s flipped on it’s side to look like a funnel. Sales is always at the pointy end. You can’t expand to the outer rings without mastering the center.

Ok. Now think about all the ways you would grow your business internally: systems, goal setting, team management, accountability, etc. These are all things your business must focus on to grow and sustain itself. And this is the area we are going to focus on with this article. Without sales it’s very difficult to focus on these things also. You need to bring money in the door. You need to hire people inside the company. You need to upgrade your software. You need to experiment with external channels. And you need to build a foundation that supports a repeatable and scalable money making machine.

By having a well-rounded focus on sales, you create more opportunity for your business.

Opportunity to wear less hats

To hire more people, to build infrastructure, to improve software and operational efficiencies, to build do market research, anything to help your business run — and without you. These opportunities allow your business to grow faster and make you a better business owner.

Without sales, the business owner must do all of these things on their own. More hats need to be worn and it’s very difficult to expand quickly. So the idea is to incrementally build your sales and revenue, and therefore your cash flow and retained earnings, until more opportunities to grow become available to you.

Sales give you revenue, which increases cash flow and allows your business to reinvest back into itself.

The first thing you should invest your money back into is people. Once you have enough cash flow, you should start hiring people to sell for you. Start building and training your sales team to replace you in this task. Once you’re able to build a sales team, you can step into a more focused role outside of sales and into growth mode. Once this cash flow continues to grow incrementally and the team is performing at a high level, that’s when you can focus on exponential growth and make small tweaks with huge impact on the bottom line.

Then you can hire people for more roles and take off more hats. You can direct your cash flow into other options like marketing, software and operational efficiencies.

Cash flow dictates how fast you can grow

Once you have cash flow and you’re investing money back into your business you have two good options here.

  1. You can keeping reinvesting your own revenue back into the business, or
  2. You can get a loan from the bank.

The latter is a hugely overlooked (and underutilized) way to obtain capital. You can only grow exponentially with capital — and capital comes with sales or a loan.

Of course, you can also get an investment but I don’t recommend this option, nor is it as fulfilling as much as the Silicon Valley buffs would have you believe. A startup founder that gets investment from a VC or angel investor too often spends it all before they figure out a solid business model. Not on purpose. There just isn’t as much accountability. The investor takes the risk and if the money runs out, so be it. The business owner who gets a loan is held more accountable. A loan requires banks to pass all the risk on to the business owner. This is a good thing — and only when you’re ready to start growing and once you know how to get sales.

A loan allows you to expand faster, to grow faster. However, before getting a loan you should have a steady stream of cash flow. Can you imagine getting a loan or an investment to hire a sales team, but you haven’t figured out to get sales yet or you haven’t built an infrastructure to handle growth? This is why SO many startup companies fail. It’s also why SO many business owners default on loans.

Does your business have the infrastructure to handle growth? Is your sales team performing well because you have systems and metrics and resources that allow them to bring you more revenue? This blog tells you how.

You can have the best service, the best product, the best sales team, and the nicest looking office, but that doesn’t matter if you’re not producing sales. This is so important, actually, that a lot of business owners will procrastinate here. Depending on your area of expertise, business owners will find any excuse in their business to avoid sales. If a business owner has a background in sales then they’ll put that at the forefront of course because they know how. But an engineer turned business owner or a tradesman turned owner, usually doesn’t know how to sell. So they go back to what their good at — tools, computers or trivial tasks — and sales don’t happen.

Business owners who understand their strengths and weakness are the ones who put themselves and their teams in the best position to gain sales and grow the business.

A majority of business owners who we talk to say they are NOT a salesperson. That’s okay! As long as you admit it and start putting people in your place to get the sale. If selling is not your strength, then you quickly need to hire help. Or alternatively, if you are good at selling, then you need to hire someone who can fill production needs and operations. Either way, sales always has to be a focus and someone competent has to be leading it.

Double your revenue

One of the businesses we are working with was looking to double revenue in less than 12 months because we focused on sales. They had put in place a competent sales team, had built the proper infrastructure, and were able to invest in more options as they became available, or possible for the amount of cash flow they generated. Then, once they properly reallocated their capital into more areas of their business, the business owner could focus on growth. His team could lean on the fundamental building blocks of high growth sales teams and companies — and they doubled sales, revenue in 12 months.

Here’s how we did it: We fine tuned their quoting system, from delivery to fulfillment, we implemented weekly accountability meeting supported by precise metrics, i.e. each sales person had a target goal and a profit margin to maintain. In the meetings, they were held accountable by the number of quotes (proposals) to make, the number of approvals they received, we talked about rejections, and we measured conversion rates to see number of sales and the monetary value of jobs acquired.

We also held production meetings which improved their gross margin, which doubled their net profit, which means they had more capital to invest in other options, i.e. more sales people, marketing and software to streamline their quoting system and project management. Which now means that their infrastructure can handle this growth and the projection for the next 12 months is to quadruple revenue.


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