Rule of Thumb
Chapter 1
Designing a Sales Strategy How do I get started?
Creating a sales strategy takes research, patience, and lots of testing. To start, you will review the competition, outline pricing, define the cost of sales, identify your target market, and create messaging and placement. Having solid data to support each step in the sales strategy will help build a better plan. What homework will be helpful for creating a strategic sales plan? Answer the following questions: 1. Identify the competition. Study other businesses that do what you will be doing. Review how they price, sell, and promote their products or services. 2. Complete a SWOT analysis. Strengths, Weaknesses, Opportunities, and Threats are tools that give you valuable insight. The SW represents internal factors, and OT is for external factors. SWOT is used to make projections and answer the questions, “Where is the organization now?” and “Where is it headed?” Here is an outline of items that can fall within each area: 12
Sales Strategy
(within the organization)
Internal
Strengths
Weaknesses
Product Services Price Cost Reputation Brand Scale Quality Adaptability Management Team Distribution Performance Processes Profitability Ethics
(outside the organization)
External
Opportunities
Threats
Economics Political Trends Customer Tastes Taxes Competition Environment Law Technology New Distribution Channels Vulnerabilities Population Ages
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Rule of Thumb
Weaknesses
Opportunities
Threats
(within the organization)
Strengths
(outside the organization)
External
Internal
Fill in the SWOT for your business:
Now that you’ve completed your SWOT analysis, answer the following questions: 3. How will the product or service be distributed? 4. Research the cost of sales or the cost of service. You want to quantify the cost of the product or service. The cost is the price of buying or making the item sold. The cost of sales is the sum of materials, labor, and overhead in making the product. In retail, it is the cost of the product. The cost of service is the measure of what it costs to create, deliver, and maintain a 14
Sales Strategy
service. In some cases, it includes labor, supplies, licensing, and goods. The cost of goods or services is a key measurement that identifies the value of your product or service. 5. Describe the features and benefits for each product or service. 6. Define the geographical area (territory) in which you want to sell your product or service. 7. Decide how much profit is needed in year one, year five, and year ten. 8. Interview industry experts or business owners about how they sell their products or services.
Rule of Thumb:
When in doubt, ask a professional.
Where do I go if I need help? ●● Small Business Association (SBA) ●● Service Corps of Retired Executives (SCORE) ●● Chamber of Commerce ●● University Business Schools ●● Trade Associations ●● Business Networking Groups, such as Rotary ●● Small Business Association of the Midlands (SBAM) ●● Fellow entrepreneurs Now that you have completed some basic homework, we will apply the information to the sales plan and later chapters.
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