Archive for August 16th, 2009
Sales Case Study: What Would You Do?
I was posed this problem recently so I thought I would open up discussion to you and get your input. What is the best path to grow sales for this company based on what we know below?
A company is manufacturing and selling 25 different products.
Company sales are split approximately 50/50 between wholesale and retail channels.
Sales cycles are short, the company is on cash terms with most of its suppliers, but the five year old company is making a 20% profit annually on just under a million in revenue.
The manufacturing facility is at 100% capacity with no ability to outsource and does not enough cash/assets to leverage for expansion.
50% of company sales come from one product and demand is increasing. The remaining 50% of sales is split evenly among the remaining 24 products.
Removing any one product from the lineup will anger some segment of the customer base and potentially impact sales to some unknown degree for every other product.
Cash flow is tight because the company is still paying off the last expansion and the largest customers want the company to extend Net 10 terms to Net 30 and some are asking for Net 60 terms on payment.
The sales team is being actively pushed to sell the entire product line every day.
You are hired as the companies first VP of Sales charged with overseeing a sales staff of 8 retail and 2 wholesale sales representatives and finding someway to get past these issues and grow the business to a point where the company can afford another expansion.
The existing retail sales staff is working at maximum capacity, and just able to cover sick days. Customer service is at an acceptable level.
The wholesale sales staff is getting irritated because their income has been capped by the manufacturing facilities inability to increase supply, and competitors in the market are promising no such problems for sales staff working in their facilities.
If everything holds steady with no significant equipment breakdowns or cash expenditures, the President has told you it will be 3 years before the company can afford the necessary expansion.
What would be your solution to this problem and how would you grow the business?
Image courtesy of jefftzucker.wordpress.com
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