ABC: Always be Selling

I know, I know.  It doesn’t work, but hey it definitely gets the point across.  I had a great conversation today with a friend of mine (at Top Pot of course) about his new business endeavor.  He will remain nameless, though he is welcome to let everybody know who he is in the comments…

Anyway, we were chatting about the first steps to creating his business; vision, legal, structure, etc.  One thing I was specifically encouraging him to do was to sell, never stop selling and to simply Always be Selling!  Even to the point of not having the resources to meet all of the projects that he has.

His initial response was that he should only sell what he can fulfill.  While this is true in theory, in practice it is completely different.  There will be clients that reneg and there will be times when the projects will downsize.  However, the biggest reason to sell, sell, sell is that it is the only way to grow your business.

If you only sell for the resources you have, then you will continue to be the size that you are now.  Sell to the degree that you have to bring on bigger teams, that you have to hire and employ people to help you to deliver on the projects and clients you have.

It is all about margin.  If you are keeping youself busy, you are most likely earning between X and 2X.  However, if you start growing and employing more people, they start to make money for you.  In the case of my friend, he is looking to start a web development agency.

In his case, he can expect to make a profit of:

• 10%: Most new agencies make 10% of every dollar earned. Also, if you don’t progress past this point then you are running your business very effectively.
• 20%: This is what the average agency will make after having been in business a few years.
• 30%: Well run agencies will earn this.

So now, you are earning from $0.10 to 0.30 of every dollar that your employees bring in.  Bring three new employees to a well run operation and all of a sudden you are doubling your income…

Obviously, it grows even faster if you are selling a product or service.  The key though, is to sell more than you can deliver.  Regardless of where the company is, keep the pipeline full and growing.