How to increase sales
This article appears in the Jan/Feb 2016 issue of Business Franchise Australia & New Zealand
Having a deliberate plan to increase sales is one of the most important business strategies for a franchise. But you can’t afford to leave this to the franchisor’s marketing! In every franchise we’ve encountered, franchise owners themselves are vital to the sales plan.
Increasing sales might sound simple enough, but there’s a lot to it. Your decision to grow sales leads to questions about how you’ll achieve and support the extra sales. And that’s why planning is so important. Here are some suggestions to help you create a plan to grow your sales. We hope they help!
Write down your goal
Our starting point is always to think about goals for the year ahead. The question we ask is: “What would we like to accomplish in our business this coming year?” And if sales growth is the goal, the question is “What sales do we want to achieve in 2016?” We also write our goals down! Written goals are very powerful. They help us focus on what really matters in our business. Having them written down also make us less likely to get distracted!
But if you really want to grow your sales you’ll need to do more than write a goal. Almost certainly you’ll need to do something different from what you’re doing now.
So the question becomes, “What are the things we must do to achieve our goals?”
Here are three areas to tackle as part of your planning process.
Decide on your sales growth strategy
The question here is “What is your sales growth strategy?” Because there are several ways to increase sales revenue, there’s more to this than you might think.
It’s not just about finding more customers! To increase sales revenue you could follow several approaches:
• Increase price, decrease number of transactions. This is a ‘premium pricing’ strategy. It means offering more to your customers, which allows you to charge more.
• Decrease price, increase number of transactions. This is a ‘discount’ strategy. It means reducing your prices with the aim of increasing the number of transactions.
• Increase price, increase number of transactions. This means putting your prices up AND selling more. It can take a bit of effort but is usually worth the energy.
It’s up to you to decide which, but remember - the sales strategy you choose will have an impact on other areas of your business. For instance, your marketing should reflect your pricing strategy in the image and feeling you convey.
In fact, your sales strategy will affect almost every area of your business, including operations, staffing, finance and management. So your planning should also look at these areas.
Work smarter in business operations
The operations side of the business involves the day-to-day running of it. Essentially, it’s about how your product or service gets to your customer.
A good planning process helps you identify what’s working in the operations side, so you can do more of it. It’s also the time to look for areas where improvement or changes are needed.
Here are three key areas to consider:
1. Staffing. Do you need to take on extra staff to support sales growth, and what training would be beneficial? This is also a good time to promote strong performers who can help you get to the next level.
2. Productivity. Look for ways to get more out of your existing people and equipment by using them more effectively. For instance, with better roster or workflow management.
3. Reducing waste. Waste isn’t only the stuff you throw away, though it’s good to keep an eye on this. Look for places where time is wasted and could be put to better use, or marketing activities that are wasted by not following up.
These are just three areas to consider, there may be more in your business. So as you start your planning, have a think about the operations area and identify areas relevant to you.
Tune up your business management
Business growth can lead to strains on the finance and business management side of things – especially because the business owner is more occupied with growing the business. So when you’re planning for the year ahead, it’s good to consider where adjustments are needed to support continued growth.
Here are three areas to review:
1. Key Information. Identify the key numbers to monitor that will help you see how the business is progressing. Some of these may change from previous years as a result of your sales plan and operations priorities!
2. Accuracy and Efficiency. Are your financial and other business reports accurate, timely and relevant? Now’s the time to consider whether changes are needed. For instance, is it time to delegate the bookkeeping to allow you to focus on business improvement?
3. Regular Review. Once you have the information it’s important to review it on a regular basis to ensure you’re on track. Your plan should set out what you intend to do about that. For instance, setting aside for a monthly meeting, and marking it in your calendar.
Peter Knight & Kate Groom are co-founders of Smart Franchise and the Franchise Accountants Network. Their workshops and business tools help franchisees make well-informed business decisions.