BUSINESS ACUMEN FOR LEADERS
“It” all starts with sales but what starts badly is going to end badly.
Sales professionals, understandably, are typically top-line driven. While there is nothing wrong with focusing on volume sales, most of an organization’s resources are planned around sales forecasts.
HOWEVER, HEREIN LIES THE CHALLENGE.
Are your salespeople being incentivized on top-line sales?
Maybe even just on gross profit?
Both of these metrics could potentially be fateful for a number of reasons and few if anyone in the company even knows it!
Sales professionals who do not have a financial background “don’t know what they don’t know”. The result is the creation of forecasts that are not achievable while often “throwing away profits” without even knowing it. Here is an example of a question that is rarely addressed:
Q: My selling price of a product/service is $100 and it cost me $70. If I am asked to discount the selling price by 10%, by what percentage must I increase my unit sales to offset the cost of the discount?
A: 50%. (there is a simple formula to calculate this number)
What about asking questions such as:
Can I sell the additional volume?
Do I have sufficient resources to supply the additional volume?
How much volume must I sell to offset stepping up costs to accommodate the volume increase?
What other alternatives do I have other than discounting to increase sales and profits?
These are just one of a few hundred of questions and topics that are addressed in our course.
Our programs teach people how to think strategically through the "eyes" of financial statements, always with shareholder expectations in mind.
Contact Us and find out how we can help your organization prosper.