Wouldn't it be great to have a predictable revenue machine?!?
One where all of your sales opportunities go in one end, the machine does the work, and predictable revenue pops out the other end?
You can create your own.
Predictability is an essential component of ongoing of revenue generation and business growth.
Predictable revenue will improve cash flows, stabilize staffing levels, increase the value of a business over the long term, and give the business owner peace mind. Without predictability a company’s growth can be erratic causing problems with cash flow, productivity, staffing levels, debt servicing, budgeting, and more.Predictable revenue can be created through the use of three tools –
- Sales Process
- Sales Funnel
- Sales Forecast
The first component in a Predictable Revenue Machine is your sales process - a list of all the steps you go through to complete a sale. By documenting your company’s sales process you will uncover any gaps and be able to fill them.
While every business is unique, there are some universal factors to consider when documenting your sales process:
Your type of sell: is it commodity oriented or consultative in nature? The process for a consultative sell requires additional relationship building steps.
Is your sales cycle short or long? A long sales cycle will require processing more opportunities through your sales funnel.
Do you have an individual buyer? Or do you sell to multiple influencers? Multiple influencers will require additional meetings, presentations, demos, etc. that your process must include.
Is your solution custom or off the shelf? A customer solution will require additional internal sales activities to create the right solution for your customer.
Do you sell into a mainstream market segment or one that is specialized? A specialized market has its own buying characteristics that need to be accounted for as you document your sales process.
In addition, you need to include the sales processes that are unique to your individual business.
The second component in a Predictable Revenue Machine is the sales funnel. A good sales funnel is the tool you’ll use to manage all of your opportunities through to becoming a sale. Your funnel should define all of your sale stages, include all of your internal and external sales activities, as well as list all of the steps an opportunity goes through to advance to the next sale stage.
Once you’ve developed your sales funnel and record your opportunities in a CRM tool, you’re ready to create a sales forecast. An accurate sales forecast is the third component of a Predictable Revenue Machine. It enables you to know which sale is going to close when and for how much. By reviewing a sales forecast during the first and third weeks of each month, you can focus your efforts on the appropriate opportunities and achieve your revenue goals.
An accurate sales forecast depends on three things:
- Commitment by everyone in sales to keep complete and up-to-date information in your CRM records.
- Agreement on definitions for each funnel stage and commitment to use the sales funnel.
- Be realistic about forecasting opportunities.
These are the components of a Predictable Revenue Machine. By documenting all of your sales processes, creating your own sales funnel, and committing to accurate sales forecasting your company will generate predictable revenue.