It is critical to plan for and adjust to your product or service sales cycles. Begin by reviewing the 10 steps to deliver a successful sales plan. Each step will affect your resources, budget and cash flow. Properly executed, you will increase your sales and profits and delight your customers.
Understand your product life cycle.
Where is your product or service today? Is it in an introductory phase, undergoing a growth spurt, delivering mature sales, or a slow decline? It is important to know where your products are in their life cycle to properly assess current demand and projected sales revenues. Review the initial buying pattern and current purchase cycle for accuracy. Is your product a 1x purchase, or does it involve multiple and repeat purchase patterns? Think toaster versus buying the bread for toast!
Examine your category trends.
Most products fit into a overall sales category that is trending up, down, remaining flat or declining. Consider the growth of eco-friendly and organic products and services as an example of a category trending up significantly and PC sales which are trending downward.
Adjust for seasonality.
If your products are seasonally driven, back into determining product needs based on start of selling season. Retail products generally have strong sales cycles that follow the seasons, Spring, Summer, Back to School, and Holiday. Gather data on when products are sold in and when revenues are booked. Do your products spike when the weather starts to get warm or cold? Review your sales by month as a starting point.
Review your Marketing Calendar.
Identify tactics that have or will cause a sales spurt. Have you updated your website and added an e-commerce site? If so, plan for increased demand to support your marketing efforts. If your sales are web based, product outages may send your customer to a competitor. Are you attending a Trade Show this year and what do you expect as a result of this focus?
Prepare your Forecast.
Start by preparing a forecast by month, based on historical sales data for rolling 12 months. Detail sales by month and product line to support your required on hand inventory levels. Benchmark past sales success with current reality. Study the trends in your category and determine any necessary adjustments.
Plan for the unexpected.
Have WOM (word of mouth) sales been accelerating during to viral social media and/or PR campaign? Is your manufacturer experiencing heavy demands for materials that are impacting your ability to make your product? The weather can play a role in your adjustment. Are you prepared for a sudden influx of sales if it rains, snows or the sun shines? Think suntan lotion, snow shovels, mittens and gloves.. Ever notice how your favorite drug store has a rolling display of umbrellas by the door for purchase when it is a rainy day? Plan to the best of your ability to take advantage of potential unexpected sales swings.
Determine your budget.
Inventory is an active asset, which means it is generating sales and profits. Do you need to tap into your Line of credit to ensure sufficient inventory? Should you consider interim financing to meet seasonal cash flow needs? Placing an order requires a down payment or perhaps the order must be prepaid prior to shipment. Consider securing a line of credit with your bank or credit union before you need it. Bolster your freedom to expand without being cash strapped. Can you secure extended payment terms from your vendors? Draft a plan of action by vendor and initiate the discussion.
What do you need to allocate: additional warehouse space? labor and staffing? improved point of sale materials? Your small business has a finite number of resources, so planning is essential to having the right resources available at the right time. Plan to use your downtime for developing your plans for seasonal shifts. Involve your staff to help brainstorm the gaps and explore potential solutions for growth. Divide up spending targets by need to have versus nice to have. Does the cost deliver a benefit to the customer? If so, establish a goal and measure the results of the resource allocation.
Deliver the plan.
Now it is time to bring it all together on paper and put a timeline in place. A timeline with milestones maximizes the right resources at the right time. Place your orders and have confirmed commitments for deliveries. Communicate your detailed action plan to your vendors, wholesalers, distributors, and partners.
If you have planned and adjusted properly, you are delivering your products and services in accordance with the sales cycle of your customers and clients. You have adjusted your stock levels and capitalized on sales by having the right products at the right time. You forecasted well, charted a plan, budgeted correctly and executed with precision. Ring up the sales! You have successfully navigated the sales cycle process.