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Selling Smart: Not All Sales Are Good Sales

by Susan Solovic on November 17, 2011

I’ve been on a hectic book tour the past several weeks, and I’ve listened to thousands of small business owners discuss their concerns.  One common problem:  we need more sales.

Yes, we’d all like to increase our revenue and build our businesses.  But hold your horses — not all sales are good sales.  Sounds counter-intuitive, doesn’t it?  In order to build a successful business, you must recognize there are times when less is more.

Allow me to explain.

Many small businesses reduce their prices in order to bring more business in the door — particularly in today’s economy.  However, in most cases the owner doesn’t stop to consider the profitability of the new business.  While the company’s sales figures increase, its profitability often narrows to a point where cash flow issues occur.  In the worst case scenario, the company lapses into a negative cash position.

All new business opportunities need to be carefully considered.  As the business owner, you should understand exactly what it is going to cost to deliver the product or service, including all your business overhead.  Is there enough profit to absorb changes or adjustments?   Do you have the current staffing and resources to manage the project without jeopardizing other business?

I’ll share a real-life example without divulging the company’s name.  ABC Company bid on a large government contract to deliver a particular service without a detailed and thorough analysis of the resources it would take to deliver.  After winning the bid, the additional internal resources and development required to fulfill the contract turned what the owner thought would be a highly profitable project into one that barely broke even.  Furthermore, because of the strain on the company’s resources, other, more profitable projects had to be delayed.

In today’s economy where cash is king, no business should jeopardize its financial health by selling too much for too little.  While it’s hard to turn business away, you can be more successful by concentrating on the types of business opportunities that are most profitable.  And it’s not always just about new business.  Some companies are choosing to fire their low-margin customers or to discontinue less profitable product lines and as a result they are enjoying healthier bottom lines.

So remember, nothing happens until you sell something.  Just make sure you sell it right.

image by Flickr user jakerome

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Why Now is a Good Time to Start a Business

by Tim Berry on May 21, 2009

Hmmm. If you’re reading this, then you’re thinking about it. And if you’re thinking about starting a business, then you have to decide on now vs. later.

Isn’t now almost always better than later?

It’s different for those who aren’t already thinking about it; but you, dear reader, you are.

OK, there might be good reasons to wait: waiting to graduate is a really good reason. Sometimes life events such as pregnancy or marriage can be good reasons to postpone starting a business. Working through the process of getting finance can be.

But those are special cases. The general rule is that if you’re thinking about it, then plan quickly and carefully (not a contradiction) and do it.

A bad economy is not a good reason. Costs are lower, good people are easier to find, customers are sympathetic.

And besides, the economy is coming back.

So don’t wait for that. Do it.

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Make a Referral – jump start the economy

by Chelle Parmele on February 17, 2009

Palo Alto Software is pledging to make a referral to a business we want to help as part of a national campaign to make 1000 referrals March 9-13.

What a great small business stimulus plan – won’t you join us?

http://www.makeareferralweek.com/pledge

Make a Referral Week is an entrepreneurial approach to stimulating the small business economy one referred business at a time. The goal for the week is to generate 1000 referred leads to 1000 deserving small businesses in an effort to highlight the impact of a simple action that could blossom into millions of dollars in new business. Small business is the lifeblood and job-creating engine of the economy and merits the positive attention so often saved for corporate bailout stories.

The week long event also features a killer list of referral experts providing valuable marketing advice.

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Enough Already. So Now Get Going

by Tim Berry on November 6, 2008

Now’s a good time to remind ourselves that the classic “buy low, sell high” principle of investment applies as well to starting a business.

Bad as the economy is–and we’re still in a major recession, no doubt–at least we have some new people in charge and real hope of leadership that can change things. There are a new resolve and a new optimism.

So if you’ve been waiting for a good time to start a business, how about now? Banks are going to have to start lending again soon, and investors are going to have to fund some deals (after all, that’s what they do: invest); and the best funding source is customers, anyhow.

Don’t just do it; plan it. Look at your market, sharpen your numbers, take a few steps back and evaluate the opportunity. In other words, develop a plan.

And if the plan looks good, go for it.

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Tim Berry talks planning in hard times

by Chelle Parmele on October 3, 2008

There’s an article from our Tim Berry that I wanted to point out for everyone today.

Economic Crises Call for Better Marketing Plans
Waiting for the next crisis to hit means you will have waited too long to revise your business plan.

As I write this, uncertainty crashes all around us like a violent hurricane. Now is the time to bolster your sales and marketing plans and get ready for disaster business planning. Lehman Brothers went under, Merrill Lynch was picked up in a fire sale by Bank of America and AIG needed government assistance to stay afloat. We’re worried about the Chinese pulling their money out of our economy, sending us spiraling further downward. And nobody has figured out what to do about huge federal spending deficits. Then there’s trade deficits (although the plunging dollar will help curb that problem), the sub-prime crisis, plunging real estate values, a crashing stock market, not much hope for venture capitalists getting money out of their investments for a while, and, wow, take a breath, what else?

Read the rest of the article at MSNBC.com

‘Chelle Parmele
Social Media Marketing Manager
Palo Alto Software

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Changing my name to Banks

by Steve Lange on October 1, 2008

This latest round of government bailout of big industry reminds me how history seems to repeat itself.

Tom Paxton wrote the song, I’m Changing My Name to Chrysler in 1980, after the U.S. government bailed out auto maker Chrysler Corporation, some 18 years before it was merged with Daimler-Benz. Here’s a short excerpt from the lyrics.

I am changing my name to Chrysler
I am going down to Washington D.C. …

…If you’re a corporate titanic and your failure is gigantic
Down to congress there’s a safety net for you…

… So when they hand a million grand out
I’ll be standing with my hand out
Yes sir I’ll get mine

Click here to listen to a performace of the song by Arlo Guthrie.

Other bailouts have helped Lockheed, Penn Central Railroad, New York City, and Continental Illinois National Bank. And so it continues with the current AIG rescue and $700 billion bank bailout attempt.

After the current bailout bill failed to pass the House of Representatives, Indiana congressman Mike Pence warned that the bailout ran counter to the principles of American government, (recent history notwithstanding).

“Economic freedom means the freedom to succeed and the freedom to fail,” Pence said.

Now, that’s not news to some businesses in the United States. The potential and “freedom to fail” is a reality, a constant care for the millions of small- and medium-sized businesses that form the basis and lifeblood of our daily lives, in every town across the country.

You won’t see national rescue bills being put forward for local restaurants, muffler repair shops, shoe stores, or book shops. Nope. Sorry. We are on our own. And short of all of us changing our names to Banks and heading off to D.C. to lobby for hand-outs, our recourse is to plan for our future, including how to weather our financial storms.

And I mean serious, concerted planning, on a frequent and ongoing basis. Planning cannot be a simple once-a-year budget exercise any longer. If you haven’t looked at your business plan, your marketing plan, and your cash flow in the last month, you are way behind the curve. The economic environment is changing daily and you are out of date. By neglecting to plan you are exercising your freedom to fail.

You have the freedom to succeed! Plan on it!

Steve Lange
Senior Editor
Palo Alto Software

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