Recently, one of my million dollar clients came to me confused. He said, “I know I make more than a million in revenue, but I sometimes can’t pay the rent. What gives?”
I had to show him how to manage sales by the numbers.
Sometimes it is hard to see what is right in front of you, right? That is why coaches are so valuable. They help to close blind spots because sometimes you just don’t know what you don’t know.
Finding the Leak in Your Sales
I looked at my client’s sales numbers, looked at his productivity, and examined his costs per person. I was able to quickly determine where his money was going, and why he had cash flow issues.
Each person in the company was expected to sell $3,100 per week, but they were only selling $2,500 per week. That’s a big deficit. That’s a loss of $600 per week per person (he had thirty) for a total loss of $18,000 per week.
If you multiply that out, it equates to $72,000 per month and $936,000 per year. That is a lot to lose. It all started with a small bleed of $600, and ballooned to a whopping $936,000 by year-end!
When is the last time you took a hard look and your sales numbers? I hope that it was only last month, and that you are not waiting until year end to review your numbers. It will be too late to stop the bleeding then.
One way that I show my clients how to manage sales by the numbers is doing a sales member analysis. I have a special worksheet I use for this (it will appear in my upcoming book, From Bootstrap to Big Time, but let me share the basics with you now.
Sales Member Analysis
Working through the analysis allows you to determine what each sales person on your team needs to produce for your business. This requires knowing your numbers and plugging them into a formula. A short version of that formula, broken into two steps looks something like this:
- Monthly Expenses—all costs in your business, on average, in a given month
- Monthly Profit—amount available to invest, in dollars (industry avg. or % of gross sales)
- Number of sales people
- Add #1 + #2 from above for total expenses + profit you need to generate each month
- Divide #4 (total expenses) by #3 (number of sales people) = monthly sales needed by each
- Divide #5 by 4 (four weeks) to get your weekly sales requirement for each person.
Notice that this formula plans for profit instead of it hoping it will be there after the counting is done. If your sales or those of your team fall below this “Recommended Sales Member Analysis,” you need to share this with your team. People will support what they help create. Work through the numbers with them so they can see how they are generated and how important meeting those numbers is to the company’s overall financial health.
If they are underperforming, you have two options. Have each sales person sell more customers or work smarter with each customer. They may need to make more sales calls, increase their closing rate, or improve the qualified leads that are ready and able to buy your products or services.
The conversation and training for your team can come out of using this worksheet tool and working through to see where the results falter. It is easier to manage results than people’s behavior. Follow the money (and the numbers) so they can see where it leads. This is one way to see how to manage sales by the numbers.
I am Your Partner in Prosperity!
PS. To gain clarity on what your numbers are telling you, take a quick assessment so you can see where you stand (go here: Carder’s Playbook). Then we’ll show you how to plug your leaks.
Susie Carder is a dynamic speaker, best-selling author, and successful profit coach who helps top business leaders to create businesses that allow them to live their dreams and achieve financial abundance. Using her Predictable Success MethodTM, Susie helps entrepreneurs to develop the business systems that lead them to substantial revenue, profit growth, and investment opportunities. Strategize with Susie at SusieCarder.com.