Business Growth Needs More Than Sales Growth


Growing Things

I was recently speaking to a friend who is a business advisor. She commented that many business owners think that growing their business is solely about increasing sales. Of course a business can’t grow if it doesn’t have the customers but also a business can collapse if it fails to consider the resources it requires to support any sales growth.
There are basically two ways of growing sales; either organically by growing sales within the business or by merging with or buying another business. The issues are different if you are merging separate businesses so here I will concentrate on requirements for companies growing organically.


 Financial – Do you have enough cash?

Generally a business will have to pay for expenses such as stock or payroll before receiving sales revenue. Additional volume creates higher up-front costs. Because of these timing differences a business can be profitable but still run out of cash. Lack of the money to pay suppliers or staff can result in the collapse of a profitable business (see here for article).


 Information – do you know if your sales are profitable?

Sales growth may not result in profits growing correspondingly. You need to know that sales are profitable so as to cover all costs. Increased sales may be because your pricing has failed to account for all costs or there may be extra cost associated with the additional volume.


 Systems – do you have the systems in place to cope with increased volumes?

A system that has been sufficient to cope with hundreds of orders may not cope with thousands of orders. A number of systems are involved here, taking orders, processing, delivering, invoicing, and ensuring receipt and recording of payment.


Staffing – do you have enough and sufficiently trained staff to cope with any increase in volumes?

Poorly trained or overworked or stressed employees can lose you customers and damage your reputation. Staff errors could also cause your business to lose money. Ideally you should recruit ahead of any sales surge.


Growing a business requires a variety of expertise. If you have any queries I would be delighted to answer them on this post or contact me here.

Leave a reply