By John Monroe
“Why do I need a salesperson or sales team? My company has plenty of business because of the last major storm.”
“We landed a large job that is going to keep us busy for months and will generate enough income to put us over last year’s total revenue.”
Do statements like these sound familiar? Have you made similar ones, only to find your business falling short of its revenue and profitability goals the following year?
Having a salesperson helps your business avoid unnecessary threats to growth and profitability because of dependency on storm events or a single large contract. A salesperson helps insulate your company from becoming dependent on any one client representing more than 10 percent of your overall business. Having a salesperson will also prevent your company from supporting unprofitable business with profitable revenue streams because of the mentality that the work is needed just to keep the labor and equipment busy.
How do you plan to grow your business if you don’t have a salesperson knocking on prospects’ doors with a solid understanding of what those customers’ needs are? I have found that most small businesses fail to focus on the customers’ needs and the issues of external markets. Instead, they focus solely on the internal needs of the business.
If you spend more time creating marketing material that describes the benefits of the product or service you offer, then you are internally focused. Rather, spend time asking your clients about the challenges they face or what keeps them up at night. Then develop a positioning statement for your company that is tailored to meet the unique needs of those target customers. Avoid the trap of commoditization of your business, as it will only erode your profit margins.
Who are the competitors in your market area or industry? When a business owner responds to that question with, “I don’t have any competition,” that owner is getting their lunch eaten and doesn’t know it. A business owner doesn’t need to be fixated on their competition, but just like driving a car, you should always be scanning the rear-view mirrors to see what’s coming up behind you while keeping a clear focus on the possible threats in front of you. Having a salesperson helps you keep your eyes on the road while still being aware of your surroundings.
The competition is bigger than your marketing area. The ease of entrance into the janitorial and restoration industry is low while the profitability and growth potential is high. Potential competitors will be greater than just your neighbor looking to start a new career.
Big money always chases bigger money, so new entrants can be private equity and M&A firms buying up existing businesses to support other businesses they own or to participate in the profitability of the industry. There could also be existing businesses looking to expand their market share by purchasing up their competitors, consolidating the market, and raising the ease of entrance — making it costly to get into the business.
Another potential concern is when major players in the industry begin to vertically integrate. Businesses start buying manufacturers of chemicals and equipment used in the industry, thereby controlling the cost of their own supplies.
The final competitor that should keep you up at night is your customer who decides to vertically integrate and cuts you out or, if you’re lucky, offers to buy you out.
The bottom line for business owners is whether you are prepared to do whatever it takes to grow your business. If you are, then commit the resources and hire a salesperson. The alternative is that you must devote a set amount of time each week to go out and knock on doors yourself.
The next step is to create an annual sales and marketing plan that maps out your sales objective, target market, approach to reach the customer, and the action steps needed to get the customer’s business. Ensure that you and/or your salesperson are consistently following the plan.
Finally, keep scanning the rear-view mirrors and stay focused on the road ahead, watching for competition that can come from any direction.
John Monroe is a Business Development Advisor for Violand Management Associates (VMA), a highly-respected consulting company in the restoration and cleaning industries. Monroe is a leading expert in marketing, sales and sales management for the restoration and cleaning industries with over 30 years of experience in those fields. Through Violand, Monroe works with companies to develop their people and their profits. To reach him, visit Violand.com or call 800-360-3513.