More sales is never the problem


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Entrepreneurs are the best people in the world. They are ever-hopeful and optimistic. They believe there is a solution to every problem; and they are usually right. However, this same optimism tends to lead entrepreneurs to believe that all business problems can be solved with more sales. Many times, this is simply not the case.

Let’s examine some typical scenarios that entrepreneurs believe require more sales.

Scenario #1: Perpetually underfunded

In this scenario business is usually good and the company is typically growing. However, the company is always broke. The business owner or entrepreneur is constantly scouring for additional financing sources. In many instances the issue is not lack of funding its lack of margin. Selling more and more product at too low a margin creates ever-increasing strain on the business model. The way out of this problem is not by selling more it’s by selling for more margin.

Scenario #2: Can’t find any good help

This scenario is a cousin of scenario number one. Why can’t a business find good help? There are only a handful of reasons: quality people do not have the desire to work for the business because of some unattractive feature, the boss interviews and recruits so poorly that competitors be him or her out for the best people, or, most likely, the company under pays for the position. The company under pays because it has to. The company has to underpay because the funds simply aren’t available to pay fair market value for talented people. The funds are not available because the products are sold at too low a margin.

Scenario #3: Salespeople need to sell better

Many entrepreneurs believe the additional sales they need can be created by a harder working or higher performing sales force. Many times, it’s not the shortcomings of the sales force that are the issue is the shortcomings of the business model or the offering. The proverbial sell ice to Eskimos plan rarely works. Trying to get more sales when the real issue is product marketability only wastes time and money. In this case there’s no point in chasing more sales when it’s simply too difficult to get them.

Scenario #4: Back to the past

All successful product and service offerings eventually get outdated. Some entrepreneurs continue to ride these dying horses rather than find a new ride. More sales of a downward trending product is probably the wrong business model. Innovation is clearly what’s needed not more sales. Once an innovative product offering is created, more sales would be wonderful. In the meantime, putting organizational effort into additional selling only puts off the necessary innovation.

Do any of these hit home? If so, the solution is simple- stop working on the symptoms and start working on the real problem. Creating powerful innovation of your business model can act as a magic wand to rid these lesser issues.

Have you ever thought you had business issue A and found issue B to be the real culprit?

Republished with author's permission from original post.

Jim Muehlhausen
Aside from his books "The 51 Fatal Business Errors and How to Avoid Them" and "Business Models for Dummies," Mr. Muehlhausen has been published in various publications including Inc., Entrepreneur, The Washington Post, MSNBC, The Small Business Report, The Indianapolis Business Journal, Undercar Digest, Digitrends, and NAICC Journal.


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