In business, it’s very easy to run out of money when you need it most.
When you master this (and anyone can), you’ll add stability to your revenue, and remove stress from your workload.
If you’re struggling with momentum and swinging from too much, to too little work in your business, this one is for you.
It’s a 10 minute read and 9 minute watch 👇
Question: What are the key elements that need to be in place that take a business from feast & famine to a consistent pipeline of leads & clients?
Sound familiar? A lot of you seem to struggle with this. Never one to hold back on an opinion, here’s my take. Complacency.
In my experience, business owners (especially those without sales experience) get too excited after closing sales and forget the basics.
“Sales and marketing don’t end at the sale.”
It happens. I’ve seen it first-hand in multiple businesses. You run a successful marketing campaign that generates loads of new leads, and you close them. Great. New customers. Everyone loves more money.
But new clients demand attention. Each day, more of your time is spent serving their needs.
The tasks that brought you these clients (marketing, prospecting, networking) slip through the cracks.
It’s ok. You’ll catch up with sales and marketing later, right?
After all, you’ve got loads of customers. You’re feasting like Henry VIII.
Fast forward three months. You’ve had no new leads, and work dries up. Shit.
What do you do? In a panic, you bust a gut to ramp up sales and marketing to attract new customers.
Desperation drives decisions. Before you know it, you’re taking on work you shouldn’t, or offering discounts.
The cycle repeats.
How to break the cycle 💥
Sorry. There is no magic hack. The only way to avoid the feast and famine cycle is to be disciplined and consistent with your processes.
But you already know this.
“You cannot teach a person something he does not already know, you can only bring what he does know to his awareness.”
So, here’s what I do in my own business. I hope it serves as a prompt for you to rediscover your own discipline.
Before we get into the strategies, I want you to remember two things:
#1: All businesses experience fluctuations in sales.
#2: If your business runs smoothly, you’re not growing fast enough.
A bit of chaos is normal. Don’t beat yourself up. I’ve spoken to hundreds of business owners, and they all feel like they’re not maximising sales or feel like they’ve got too much on. It’s normal.
The key to success is not getting complacent. In the good times, it can be easy to think it’s always going to be that way, but famine can creep up on you. Fast. Running out of money is your biggest business risk.
With that in mind, here’s how I avoid it.
#1: Always be Selling 💸
When you’re busy, sell. You should never stop selling. I demand an ‘always selling’ culture in my businesses.
It’s not sexy. In fact, it can be quite boring. I create a consistent pipeline of leads by completing daily tasks that generate qualified leads who are followed up and closed using tried and tested techniques. The result is more clients.
If you do more, you won't get less.
It’s about turning up daily. If you miss one day, it’s easy to miss one week, or one month. Just like the gym.
New habits don’t happen overnight. It will probably take you anywhere from two months to eight months to build this new behaviour. But try and commit to daily checks on sales and marketing activity.
I need you to become obsessed with it.
Every business is different. Work out a frequency that works for you. I’m talking about content marketing, paid ads, prospecting, networking, sending proposals, and closing leads.
If you don't know where to start? This edition taught you my own sales process that you can steal:
When you’ve agreed on yours, stick to it. Especially when busy.
If you’re not already, track these numbers (at least monthly) to keep you honest:
Number of leads generated
% Converted to Sales
Number of repeat orders you get from customers
The value of the orders you get
If you’re a service-based business reading this, you might be worried that you can’t keep taking on work and maintain standards. More on that below.
#2: Keep a Tidy Pipeline 🧹
When famine strikes, too many people waste time on unqualified leads in their pipeline.
A full pipeline might look impressive and take pressure off when reporting sales figures, but it’s giving you a false sense of security.
Remember, there are three types of lead in your pipeline:
They buy from you - win
They don’t buy or use an alternative - lose
They never make a decision - lose
Get rid of 2s and 3s by using the close the file email.
I’ve closed over £150k of lost deals just this week. There’s no place for optimism in sales.
You’ve either got to make the sale or move on.
#3: Control Your Spend 🎮
When business is good it’s easy to get carried away with spending. I’ve worked with owners who are prone to overexcitement and spend money they don’t have.
“Save money when times are good.“
I run a tight ship because it’s important to understand where your money is going
Budgets stop you from spending money in the wrong places. Without one, you’ll likely invest too heavily in optional ‘nice to haves’. This often means you’ll run into trouble down the line if sales dry up.
Right now, what matters most is cash in the bank.
What is the bare minimum your company needs to survive?
If there was any hesitation, or you don’t know that figure. Work it out. I’m always surprised at how few business owners track their spending.
What are your fixed costs?
Form a list of all your expenses, and identify the repetitive costs each month (don’t forget to add annual costs and divide by 12). Add them up to get your total fixed cost for your business.
Write that figure down. Memorise it. That is the bare minimum your company needs to survive.
I was once advised to keep three months of operating costs in the bank. I know some owners who prefer six. Whatever the amount, it makes sense to create a reserve. An emergency pot.
Expenses creep up on you. Things break and need replacing. Having a reserve helps you to get through the famine.
Finally, make sure you’re not paying for things you don’t actually need or want (I take a day off each year to do this in my home life too). Are the items bringing you a return on investment? If the answer is no, get rid.
One word of caution. I run a lean business, but I’m always focused on growth.
Savings are capped. New sales are unlimited.
So, don’t waste time (especially if you’re a start-up) agonising over every penny.
#4: The Marketing Rule of 7
Just like sales, consistent marketing, even when busy, is essential to stop the feast and famine cycle.
Marketing generates leads. If you stop, guess what happens.
When leads dry up. you’ll likely switch to short-term marketing tactics. This is bad. Buyers typically need lots of touchpoints, over a long period before they’re ready to buy.
It’s called the rule of 7 marketing principle. The theory is that potential customers must see a message at least 7 times before they’ll be provoked to take an action.
Over the years, it’s been refined further, and new research indicates that a buyer needs 7 hours of interaction, across 11 touch points, in 4 separate locations before they make a purchase.
So, even when you restart your marketing efforts you’ll likely run out of time before they’re convinced to buy from you.
You must stay consistent with a plan.
As you know, I’m a huge fan of making evergreen content marketing. Videos. Blogs. Social Posts. It means I’ve got a bank of content that can be shared and recycled. Even during busy periods.
Before we finish, let’s briefly look at ways to cope with extra demand when times are good.
I’m focusing specifically on service-based businesses here. If you’re selling a product, you should be able to predict demand and scale your manufacturing and processes accordingly.
#1 - Aim for Retained, Long Term Work
If you’re making lots of sales consistently, it probably means you’re offering a really good service.
So, over time you can become pickier about the clients and projects you take on. The goal is to avoid filling your available time with low-paying, urgent projects.
It sounds obvious but cash flow is key. Long-term arrangements help you predict how much money you’ll make and it only takes a few of these to remove any trace of feast and famine in your business.
It’s a game-changer.
In my business, customers have two payment options for premium products (our yachts). Upfront or pay monthly (we have a 70:30 split).
Upfront customers pay slightly less because there is less admin work and we want to incentivise payment in full.
The upfront option is ideal for large corporates who need to offload their budget (year-end was big for these types of sales).
The monthly recurring option means we can guarantee cash flow for the next 12 months, and can accurately plan our workflow.
#2 - Build a Trusted Freelance Team
Outsourcing is a whole newsletter for another day. But in this context, it makes sense to build a trusted network of freelancers you can utilise when things get busy.
Create this team before you need it. We trial freelancers all the time, and although our work for IAM is produced in-house, we have a bank of trusted freelancers we can sub in when needed.
If things continue to go well, you can take on full-time employees to cope with demand. But remember, payroll needs to be paid regardless of how much money you made that month. So, this is a big commitment.
With a freelance team, you only need to pay them when the work is there. Plus, you can tap into a much wider talent pool as you’re not geographically restricted.
Homework 📚
👉 Create an ‘always be selling’ culture in your business. Don’t get complacent.
👉 Track weekly sales activity.
👉 Get rid of 2s and 3s in your pipeline by using the close-the-file email.
👉 Understand your costs and try to save a 3-month emergency reserve.
👉 Don’t stop marketing, especially when busy. Create evergreen content that you can recycle.
👉 Aim to create retained, long-term work when times are good.
👉 And finally, build a trusted freelance team to cope with increased demand (before you need it)
Actionable Advice 💡
Running a business can feel overwhelming, and there’s a lot to take in there. So, if there’s one takeaway from this edition that I want you to try, it’s creating a retained offering. I can’t overstate the impact it’s had on my businesses.
Important Reminder: Don’t undersell yourself. Instead, think of a dream package. A package that would really move the needle in your life. Now try to sell it to just one person. Once they’re sold, blow them away with your service. You can then scale the model with a testimonial in the bag.
That’s all for this issue.
I’ll be back with more ways to improve your sales, market better, and grow your following next week.
As always, you can ask me about any of the topics covered in the slack community.
Thank you for subscribing and I’ll see you next week.
Cheers, Mike 🤑
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