For our second in depth look at growth tips for your succession plan we are going to focus on defining your sales process. You may wonder what your sales process has to do with succession planning but keep in mind that, all else equal, the higher your profitability the higher the value of your business so making sure you have a defined and repeatable sales process is vital when preparing your company for an ownership transition. To help you assess your sales process, below are four questions you can ask yourself and your employees.
1. Which customers/clients are you selling to? We find that many business owners are either trying to provide products and/or services to anyone who walks through the door or are focused on a market segment that is not supported by their sales data. Therefore, take some time to look at who is purchasing your products and services. You will likely find that there are specific buying patterns that can help you better tailor your products and/or services to your highest grossing customer/client segments.
2. Could an outsider figure out your sales plan? Sometimes we are so used to our current processes that we don't stop to consider whether the way we operate can be understood by anyone but us. With your sales plan, we suggest a simple test, if you hired a family member or long-time friend who is not currently involved with your business, how quickly could they figure out how you sell your products and/or services to customers?
3. Do you have a system for compensating your salespeople? Even the best sales plan falls apart if there aren't proper incentives in place for the employees who are implementing the plan. We suggest you speak with your employees during their annual or semi-annual review to gather information about how happy they are with their compensation structure. It can also be beneficial to ask them about their ideal compensation structure. Involving your salespeople in the compensation planning process helps improve communication and outcomes.
4. How are you tracking your sales? Those of us in the small business community can copy the success larger companies have had with big data by finding IT systems that help us track who we sell to, how much we sell of a particular product/service and the length of our sales process. Collecting this data is valuable when making sure you are selling to the right customers/clients, making sure your sales plan is easy to decipher and properly compensating your salespeople.
We believe the best succession plans maximize the value of your business while leaving the new owner in a position to continue to grow the company. Based on this goal, we suggest taking time now to create a sales process that is easy to understand and targets the right customers/clients. A well-defined sales process allows the next generation of leaders to grow the company with the tools you have already developed, ensuring your business continues to thrive and deferred payments for the ownership transfer can be easily funded.