Many businesses under $10 million are focused on the traditional sales channels like major retailers. For many. this is the Mother load, but when there are more competitors all the time and major retailers with flat to negative growth after factoring for inflation, there must be other tactics employed while also making sure you have financing strategies in place to handle growth when you find (i.e. factoring invoices, a/r financing, ABL, credit insurance and more).
It might be tough to grow sales but NOT IMPOSSIBLE!
Like any goal, there must first be a plan. In this case, there must be a business plan with action steps and obtainable goals. So, what tools can be used today to assist in driving sales that most others in the small to medium market are not using. My business school marketing professor always told me to pick a niche and own itmy add on to this, is to at least be very good at niche so your company stands out.
When selling products, the following are tools you must consider:
1. A sales strategy that takes the road less traveledgoing where your competitors are not comfortable will be a major asset. Consider selling to distributors that are solid in foreign countriestake small steps in this direction to open new markets. Selling directly to Carrefour or BenQ is not likely and unwise. If you have experience selling to the US retailers, then selling as a foreign company to a large foreign retailer requires stepping your game up to a whole new level which most small to substantial medium sized businesses are not ready for.
2. Factoring invoices can provide cash quickly to a business that needs to turn around and buy inventory or make payroll, and cannot wait for a traditional banks decision making process that takes months.
3. Make products unique and try to stay away from seasonality if possible so if a sales cycle is missed then the product(s) can be sold at later dates and to others in different regions as well
4. Promote your product were your competition is not heavy this can take the form of non-traditional retail channels, trade magazines that only distributors read, corporate sales, , etc. Picking a Google Ad word is great but if all your competition is fighting for the same word, there will be little response because there will be too much noise for real prospects to see your ad. Select sites that are important to your business but off the typical path that your competitors are following.
5. Make sure you have at least 6 months of working capital in case there is a dry spell in sales finding banks and alternative lenders that specialize in providing working capital for your business model is mission critical. Often, smaller businesses dont qualify for traditional business loans. Additionally, SBA loans are not practical because they offer amounts that are too small for real growth and they usually require pledging everything you own so no other financing can be done.
6. Factoring programs that incorporate a trade finance platform are also valuable as many of the current US businesses are purchasing abroad and having a lender that can issue Letters of Credit (LCs) directly will save you money and brain matter in trying to coordinate the logistics, docs, and terms that protect you correctly when issuing an LC.
7. Supply chain financing is often a term tossed around as a catch phrase, but understanding that a lender that has this type of expertise and program will be an added value in making sure your company produces the right goods at the right time so that appropriate Quality Control (QC) measures are in place, the assets or people on the ground are appropriate for monitoring your efforts, logistics are being monitored, a continual process and system for reviewing the foreign factorys credit to perform accordingly, and many other important features for importing from or selling to foreign firms are in place. PMF Bancorps Supply Chain Financing Plus Program is an example of lender program that incorporates these kind of services.
8. Lastly, remember to get the money when you dont need it because when you do, it wont be around.