In yesterday’s blog post, 6 invisible problems of success: Why sales funnel overload is a bad thing for your business, I listed 6 problems that you will face in your business if your business becomes an overnight success. In today’s blog post, I’m going to talk about how to avoid these invisible problems.
In short, the problems discussed yesterday were all related to one issue: Becoming so busy trying to sell and deliver your products or services to a larger-than-expected group of people that you completely ignore the rest of your business. The spike in business seems good at first but it’s a short-term bonus that will keep you from focusing on long-term growth… and that is not good. It can even ruin your business.
Here are four ways to make sure your business survives those unexpected spikes.
KNOW YOUR BUSINESS
The first way to keep your business stable (and to keep you from becoming overwhelmed) is to know your business really well. Constantly take your business apart and put it back together again. Know your numbers. How many people do you typically see in each stage of your sales funnel? On average, how much do your newly converted customers buy from you? How much time do contacts take to progress through each stage of your funnel?
Knowing these numbers allows you to see what’s going on in your business at a glance. When your Audience contacts suddenly spike, and if you know that it takes 2 weeks to move someone from the Audience stage to the customer stage, and if you know your ratios, you’ll have a pretty good idea of what will happen to your business two weeks before it happens.
(Note: Don’t just pay attention to the Audience stage. A spike can happen at any point in your business. For example, an endorsement from a respected business leader can suddenly help you convert more Prospects. So you can still be surprised, but knowing your numbers can help lessen the surprise.)
Building systems in your business not only helps you to manage your sales funnel from a distance, it also helps to even out those potentially business-killing spikes in business. Automated systems can include email capture and autoresponders, drop-shipping services, outsourced marketing, and outsourced customer service, just to name a few. Make it a goal to create automated systems for every step of your sales funnel in every stage of your sales funnel. You might not be able to automate EVERY step, but the more you do, the better.
By creating and implementing these systems, you can take a step back from the extreme hands-on, day-to-day marketing and sales requirements so that you can spend more time on load-leveling and problem-solving activities: When your marketing and sales activities are chugging along without your time-sucking attention, you can pour more of your valuable resources into dealing with those sudden spikes when they happen, and you’ll be confident that the rest of your business will continue growing with your minimal attention.
CREATE FLEX AND WARNING SIGNALS
Using your new-found knowledge of your business, and your shiny new business systems, build flex and warning signals into your business.
Flex in your business gives you a bit of a cushion just in case business grows faster than you can manage. An example of a place where flex is helpful is your autoresponder: If you’re currently paying to send out 10,000 emails a week to your list, and you have a list of 9,500, you have a cushion of 500 names. That might be fine. But if you get a huge spike in business and 1,000 people sign up, you might find yourself scrambling to pay for more autoresponder space to meet your growing need. Instead, you should be looking ahead of time at what your options are – how much does another 1,000 emails cost. Or, are there dead emails that can be cleaned up instead.
You don’t want too much flex because you may end up with a lot of unused infrastructure. But some flex is good. Inventory is a good place to build some flex.
Warning signals are specific milestones and actions you need to take as a result. First, list some specific milestone in your business (for example, a 15% increase in the number of contacts in a stage or a 10% improvement in a stage-to-stage ratio). Then, write down what actions you can take as a result (for example, increase inventory by 10% or increase prices by 5%).
DEVELOP CONTINGENCY PLANS
How many times can I beat this drum? Haha. Contingency plans will save your ass again and again. Create lots of contingency plans for the most likely problems you’ll face. List them and figure out how to solve them.
Many of your contingency plans will be started by the flex and the warning signals I just talked about. But it goes beyond that. You should be building relationships with vendors so that they’ll step up and help you if you find yourself in a jam. You should consider the possibility of sending customers to your competitor if you find yourself completely overwhelmed and unable to meet everyone’s needs.
NOW GO DO IT
Okay, I’ve given you some specific ideas for your business. Now it’s time to start working on them. Get to know your numbers, explore some systems options, think about how you can create some flex in your business, and then develop contingency plans. It takes some preparatory work but when your business picks up, you’ll be glad you did it.