One of the common mistakes in early stage businesses, particularly technology or software businesses is to chase individual sales. Why might this be a mistake?

If your product or solution is relatively complex and, especially for those big show-case projects, has a long sales cycle, it is easy to be lured into chasing the big projects. Businesses find themselves with a pipeline of a relatively few large projects, all requiring some degree of bespoke development work. The danger of this strategy is in many areas:

1. All your sales eggs are in relatively few project baskets;

2. You are spending all your sales time completing tender documents instead of building relationships and market insight;

3. You do not get paid in full until the project completes in full;

4. Your prospects could easily delay or cancel a major project – reducing your pipeline by 50% in one go;

5. Your precious development resource is diverted to a sales support role in creating the customisation for each project;

6. If you win a project, the next one relies on establishing many new relationships and starting again from scratch;

7. The only evangelists promoting your product are on your payroll;

8. You have very limited feedback on lost business – restricting your ability to refine a technology into a genuinely marketable product;

9. Risk!

Now consider and alternative sales plan. You identify the businesses who supply smaller projects to the market using standardised components. You build relationships with several of these businesses and ensure that the insight you gain from talking to them influences your standard products. Now you have their sales teams selling your products. Your sales force is multiplied by a factor of as many of these reseller businesses as you are talking to.

Who are these businesses who might sell for you? They are called many things in different industries, but they exist in most technology and software based B2B industries. Their generic descriptions vary – here are a few you might encounter:

• Wholesalers

• Manufacturers

• Distributors

• Resellers

• Value Added Resellers

• System Integrators

The question to ask yourself is:

How many times should I sell my product?

• Once for each sale?

• Once for each 100 sales?

• Once for each 10,000 sales?

The right answer will depend on your own business and your particular circumstances. The key point is to ensure that you have a balanced sales and marketing activity which is building a combination of run-rate and project business that you can resource properly and fulfil effectively – in all respects.

This was a guest post by Paul Fileman of SPS who are a national team of proven senior management professionals, passionate about working to help businesses achieve their next level of development and performance. Whether they are facing market changes, financial problems, people/skills issues, or are preparing a major project, they offer dedicated support from a multi-disciplined team of experts.

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