Many years ago I was part of a business team with an amazing purpose.
This was so fulfilling for me!
Better yet, we were breaking sales records. Everyone had big hopes we were going to make more money than ever.
Fresh off these wins, during a planning meeting, we asked the natural question. “How can we double revenue again?”
Then someone chimed in to challenge our obviously small thinking: “Why 2x revenue when we can 10x it?”
A hush filled the room as everyone allowed the awe of such a sweeping statement to sink in.
It was a smack down of notable proportions, combined with the inspiration that comes when one sees the Grand Canyon for the first time!
Over the next few hours, we had an inspired debate to determine our 10x path. We figured out all we needed was to 10x our lead flow.
This created new questions:
1) How to host more free to attend lead generation events?
2) How to boost our social media presence, including increased use of video?
3) How to hire more salespeople to handle our increased lead flow?
Our meeting concluded. We looked around the table, sharing glances loaded with hope and excitement. It was the thrill of a new plan combined with the pride of grand accomplishment.
We had a new and thrilling vision! And an incredible amount of work ahead of us, but we had each other and we felt destined for greatness.
The Beginning of the End
The following Monday, we kicked off the new plan. Everyone on the team was amped!
Unfortunately, the flaws of our plan started to show within just a few days.
Flaw #1 – We did a poor job of resource allocation. We were spread way too thin across way too many projects.
Flaw #2 – We were unrealistic on how long it would take to build and launch our new marketing assets. This created a big delay in leads showing up for our sales team to close.
Flaw #3 – We didn’t understand our clients well enough. We tinkered with increasing our prices, and clients got a bad taste in their mouth. They stopped referring their friends and family, and our main revenue dried up altogether.
After one month on our new plan, we sat back to take stock of what had happened. As we reviewed sales numbers, a pit developed in our stomachs: sales weren’t 10x, they weren’t even 1x, they were 0.5x.
Cash in the business got tight, and panic was written all over the owner’s face.
One of our salespeople, working on straight-commission, suddenly couldn’t cover his bills. With little income, his family life became strained.
We called a meeting and asked ourselves a noble-yet-misplaced question: how committed are we to this cause? Passionately, everyone recommitted to the business and the path.
Looking back, it was both beautiful and tragic. Such passion and commitment, but a business that was on a scary crash course.
The weeks ticked by. As much as we tried to grow revenue, we never recovered.
All contracts were fulfilled, and the business closed shop.
Discovering True Progress
Disappointed by the losses of this earlier experience, I wanted to know what could create true success in business and what I was missing.
In order to honor the precious people connected to the business (families, customers, team members), I wanted to be way more responsible with my contributions to future businesses.
After all, I’d been a part of teams where the sole focus was sales, sales, sales, and yet somehow the business closed down.
Suddenly it came into view where we went wrong with the previous company.
I’d heard Tim Francis (CEO & Entrepreneur) talk about the dangers of “Sales Cures All,” and how his course, Know Your Numbers, in three short days, would help any Entrepreneur to finally understand how to create true prosperity and success in their business.
I enrolled in the Summer 2017 Know Your Numbers and was blown away. By the first lunch break on day one, I learned about the Cashflow Forecast. Had we just had this tool at my previous company we likely would have bought enough time to save the business.
Then, later in the course, I learned about Concentration Risk, and – again – it hit me between the eyes seeing that my previous team had – unwittingly – been riding on the cliff’s edge for months on end. Yet we had no idea.
Listening to Tim’s approach to business, it’s like he’d seen inside my previous company’s strategy meetings.
The way he was describing the pitfalls Executive teams make over and over again was illuminating and deeply inspiring that there was a better way.
Becoming a Pro Executive (CEO, COO, etc.)
Since that first experience in Know Your Numbers, I’ve since taken the course four more times. I’ve also taken on a handful of other fractional COO roles and have had the opportunity to roll out some of the Know Your Numbers tools in my clients’ companies.
The summer of 2018, I recommended to one of my clients that they hire a new vendor. With one phone call, we increased company net profit over the next three years by $67,273 (and counting).
Which was also $67,273 of extra real cash money in the business.
Had my client tried to make that same profit jump by increasing sales, they would have had to sell an extra $672,730.
Generating an extra $672,730 in revenue would have taken about 3-5 months. Cutting $67,273 in hidden operating expenses, though, took one phone call.
It’s a perfect example of how selling more is often a legitimate option, but can be way harder, slower, and riskier than any of a dozen different ways for a business to become more successful.
Going from the pain of contributing to a dying business to seeing businesses thriving has brought me the deep satisfaction of a job well done.
Just Sell More isn’t Enough
Most Entrepreneurs, my former self included, are told and profess “Just sell more”, “Build a 7-figure company,” and “10x your revenue” is the answer.
Painfully, I’ve discovered first hand this is NOT true.
Since attending Know Your Numbers, I see the matrix more and more. Everyone runs around trying to increase sales, but this is not true progress, it’s a mirage.
“Just sell more” might sound simple, but it’s dangerous.
While neglecting the other key parts of business; like strategic planning, managing risk, knowing your cash runway, etc.
Has “just sell more” been one of your favorite ways to solve problems in your business?
If so, I’m confident you have a goldmine of cash just waiting to be discovered.
Are you interested in finding this hidden goldmine?
If so, let’s talk! Email me: Kyle@GetThoughtfulLeadership.com
To your success,
PS – You work so hard in your business. I’d be honored to ensure you’ve found the hidden goldmines in your business. Your life, energy and time is so valuable!
Kyle McNeil is a Fractional COO for service-based businesses in the $1M – $10M range.
Kyle is based in Calgary, Alberta, Canada.