While the document I eventually created dealt with 12 key challenges, here is a summary of four that I’ve observed are most common to small businesses we coach ($1-25 million in revenues) along with how best to help your business to blow through them.
Lead Generation Challenge: Lead flow is too low or inconsistent.
It is a struggle to find the qualified leads you need to reach your sales targets. Your lack of leads scares you.
High Probability Solution: “Feed your winners; starve your losers”.
Identify which of your current lead generation tactics are your “winners” and which are your losers, then to redirect the time, money, and attention you were investing in your bottom 50% “losers” and reinvest that energy into your top 20% “winners” to scale those.
(NOTE: Another “high probability solution” to this challenge if you don’t have a clear winner is to pick one or two lead generation tactics to test and track over a 60-90 day period to find your winner. Repeat this process until you find a winner, then scale that winner as best you can.)
Lead Conversion Challenge: Too many leads to effectively follow up on them given your current sales capacity.
But you have unused capacity to produce more of your product or service!
High Probability Solution: Pause for a moment and create a way to filter and sort your leads into buckets so that you can invest your best sales energy and resources in your best leads.
Then give each successive bucket less energy, focus, and effort.
Of course you’ll need to create a baseline system for this to happen, tie it into your lead follow up and drip marketing, and track your results. But don’t let your compulsion to make this perfect freeze you in your tracks. Know that you’ll refine this system over time, automating more and more of it.
(NOTE: Another “high probability solution” to this challenge is to simply “Hire More Sales People”.)
Operations Challenge: Not enough operational capacity to produce enough of your product or service to meet your market’s demand.
It likely feels like your operations pillar is bursting at the seams. If only you could find more “producers” to do the work, you have a ton of business waiting to come over to you. You’re afraid to take on more business because you’ll overwhelm your company’s ability to fulfill on more business at the same quality and service level.
High Probability Solution: Optimize your production process.
First, get clear on what your real production limiting factors are. Is it a specific person or functional role that is your bottleneck? Is it the flow and communication across people or departments in the production process? When you spot your real limiting factor then you are able to solve for the most important variable.
Do you need to hire more? Do you need to push down tasks and responsibilities to best leverage your most skilled and scarce process “experts”? Can you create better efficiencies to get more production out of the same resources? Do you need to better train your team? Can you automate or template more of the work?
(NOTE: Another “high probability solution” to this challenge is to “fire” your lowest margin business and free up that capacity for better, higher margin business that is clamoring at your door to work with you. Or you may need to raise prices – supply demand remember?)
Finance Challenge: Cash flow crunch.
You have too much of your money sitting in uncollected receivables. Or you may even be losing out on 10, 20 percent of more of your actual profit by not collecting on all that you are owed for the work you’ve delivered to clients and customers.
High Probability Solution: Improve your collections process and collect more of what you are owed – faster!
Don’t take collections for granted. One attorney we coached initially said, “Well my uncollected fees are just five percent, why does that matter?” But when we showed her that five percent was costing her over $50,000 a year of lost profit she became must more serious about her collections.
First, what is the real cause of your collection issue? Is it just an issue with specific customers or does it apply across the board? Is your collection issue just on specific service or product lines? Or at specific locations? Or with specific sales team members’ customers?
Maybe your cash flow issue isn’t about not collecting what you’re owed, but rather it’s an issue of getting paid too slow? Do you need to collect more up front (at least for specific types of customers or projects?)
The key is to really understand the key variables and leverage points at play so that when you later create your version 2.0 collection system you’re focusing on the most important aspects.
With this understanding, now you need to fix your collection process to get paid more of what you’re owed–faster.