Not knowing where next month’s sales are coming from is a common stress point in small businesses.
In my last business we had the most amazing long term recurring revenue model – we did monthly book keeping and management accounts and I could predict my monthly income for years in advance! (Fabulous but actually pretty boring!) But this business is completely different, we do have some recurring income but most of our work is project based to get our clients very specific financial outcomes. Which means I have to get my head around coping with less predictable income.
I see the effect of this stress on so many business owners so I wanted to find out how we can cope better with this uncertainty, because being in a state of stress and worry stops us thinking clearly and performing as well as we could.
Talk to an expert!
So this week I’ve been chatting with an old mate of mine Martin Burnett who’s one of the founders and directors of Cherry Professional, the East Midlands recruitment firm. I’ve known Martin for over 20 years; he used to get me my finance jobs when I lived in the corporate world, and Cherry are my Go-To recruiter for my clients because they always do such a brilliant job.
I can’t think of many business models that are more aggressive and unpredictable than recruitment so I wanted to find out how they cope with it and how they’ve built such a successful business over the last 8 years – now employing 24 people.
It’s actually pretty scientific
Firstly, look where you could build more recurring revenue into your business. Cherry’s aim is to have their temp margin covering their overheads.
Then everything else is about knowing and working your numbers.
Have a strong business development plan
Cherry have a business development plan that drives all of their marketing. Not something they wrote once and stuck in a drawer, but something they use every single day. They have a clear strategy for keeping in touch with all previous clients and are constantly looking to how they keep finding new ones.
A detailed marketing plan that drives their daily activity
They are marketing ninjas! They know exactly what activities work, how many calls need to be made, how many new contacts, how much networking and social media they need to do.
They know every number, measure and metric so they can use these numbers to pretty well predict future income.
Every person in the business has marketing and sales KPIs to work to, and as long as they measure and manage these by person, they can trust that they’ll hit their sales targets.
You see, Cherry have worked out what most business would kill for – they KNOW what marketing and sales activities bring in sales. They know the levers to pull, the buttons to push – the activities that bring the business in consistently, and for that I take my hat off to them.
So close to the numbers you know when things are off track
It helps that Martin originally trained as an accountant back in the day, but their business is run on the numbers. They know that if they do the right things they will get the result they want, but also when things aren’t working they know they’ll see it immediately- it will show up in the leading indicators pretty quickly.
But you can’t take anything for granted
I really got that Martin didn’t ever take what they have for granted. He said they invest heavily in the right technology to give them the information they need, and they have to surround themselves with the best people they can.
And you can’t assume what you do today will work tomorrow. You have to know your customers well and be where they are, you’ve got to keep up with the technology and the ways people want to do business, and you have to keep getting out there networking – building up your contacts and keeping in touch with people.
A blueprint for consistent sales?
I’ve always been impressed by how Martin and Danielle run Cherry, but after this interview I’m even more so. They seem to have the holy grail of a sales blueprint that works in a world of lumpy and unpredictable sales. What they do so successfully means that they can consistently achieve a predictable result in a very uncertain industry.
Of course they can only do this by having a fantastic, motivated team who are capable of implementing their plan, so Cherry Professional can continue to grow and become even more successful!
There is definitely stuff I can learn from them. I’ve decided to trust more in my marketing and stress less about what January’s revenue is going to be!