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It goes without saying that a sudden drop in sales is bad news for business. When you start losing customers, you’ll struggle to bring in enough revenue to cover your overheads and then you’ll be in some serious danger. If you can’t find a way to kick start sales again, it’s likely that your business is going to go under. But what a lot of people don’t realize is that a sudden increase in sales can be as dangerous as a decrease. You’d think that a boost in sales could only be good news because it means that you’ll be bringing a lot more money in and your profits are going to shoot up. That will happen, but only if you’re managing that growth properly.
Rapid growth can actually kill your business if you aren’t prepared to deal with it. Your manufacturing and shipping costs will shoot up, your staff will be a lot more stretched, and your website is going to get a lot more traffic which means that it could crash. If you’re not prepared to tackle all of those issues, your customer service is really going to suffer. It’s important that you’re getting all of the products shipped out in time and you’re dealing with any customer queries promptly, otherwise, you’re going to lose all of those new customers and a lot of your existing ones as well.
A sudden increase in sales gives you a good opportunity because if you can deliver, you’ll get a lot more loyal customers and your business will start to grow a lot. But if you don’t handle it well, you’ll miss that opportunity and it can spell disaster for your business. If you’re seeing a big increase in sales, here’s how to handle it properly.
Do A Growth Analysis
When you’re in the middle of a period of rapid growth, it’s easy to lose track of exactly what’s going on in the company. That’s why you need to do a proper growth analysis to see exactly where you stand. Take a look at your sales figures and work out how much growth you’ve seen over the last few months, this will help you to make projections about the next couple of months so you’re prepared. You should also have a look at your marketing activities over the last couple of months and see how they correlate with your sales increase. This will help you to identify how you managed to inspire this growth in the first place so you can recreate it in the future. Then you need to look at your inventory and your manufacturing operation so you can see whether your output is high enough to meet sales demand. Finally, you need to look over your finances and see whether you have enough available capital to fund an increase in output and expand the business where necessary.
When you’re doing your growth analysis and trying to identify the reasons for your sudden increase in sales, it’s important that you consider seasonal factors. If you sell products that are particularly seasonal, there’s a chance that your growth might be temporary. For example, if you sell big winter coats and you’ve seen a big increase in sales when the cold weather sets in, it’s likely that sales will dip again once the winter is over. If you overreact and start expanding rapidly, your overheads will increase a lot and you’ll struggle to cover all of your costs when sales drop again. Just make sure that the growth isn’t just a seasonal thing before you start thinking about any serious expansion.
Once you’ve performed a full growth analysis, you can get an idea of where you stand and what you need to do to manage your sales increase properly and maintain your recent success so you can look toward long term growth for the future.
Increase Manufacturing And Shipping Staff
The most important thing that you need to do is make sure that you can actually produce and ship enough products to meet sales demand. If you can’t do that, you’re going to end up with a lot of angry customers on your hands and sales will start to drop again very soon. That’s why it’s important that you hire some more staff in your manufacturing and shipping departments. When you need some new staff in a rush, you should get in touch with labour hire companies who can help you out. They’ll be able to source plenty of qualified people to staff your manufacturing and shipping department so you can meet demand. It’s important that you increase staff numbers quickly so you aren’t letting anybody down. It’s also a good idea to look into temporary staff at this point because you can never be sure that you’re going to sustain that growth. If you hire a lot of new full time staff and then sales drop off again, you’ll end up paying salaries that you can’t really afford to and you’ll have to go through the difficult process of firing people.
Update Manufacturing Equipment
When you’re first setting up your business, you won’t have the money to invest in the latest manufacturing equipment so you’ll probably end up getting older models or second hand stuff. That’s fine and it’ll suit your needs when you’re a new business and you’ve got a fairly small output, but when your sales start to increase in a big way, your current manufacturing equipment might not cut it anymore. If you’re struggling to meet demand with your current setup, you may have to think about investing in some new equipment. It’s going to cost a lot of money but if you don’t do it, you won’t be able to sustain your growth.
Update Your IT Systems
Technology is your friend when you’re trying to manage business growth. When you see a big increase in sales, every single department in your company is going to be stretched. One solution to that is to hire more staff and in some areas, like manufacturing and shipping, it’s the best thing to do. But in other areas, it isn’t cost effective to hire more employees and, most of the time, it’s not necessary. There are some great technologies that can increase productivity in your business. Things like project management tools are great for organizing departments and managing their workload properly. You can also use sales and marketing software to help deal with the increased workload in those areas as well. Updating your IT systems is the most cost effective way of handling an increase in sales because you don’t need to hire loads of new employees.
Your online security is so important as well. You should already have security software in place but as your business grows, you become a more attractive target for online criminals. That means that your current security software might not be up to scratch anymore. You should speak with IT professionals and have them install more comprehensive security software so you’ve got the protection that you need.
Your website is another area that you need to think about because it’s likely to struggle during a period of growth. There’s nothing more frustrating than an incredibly slow website and it’s really going to put off potential new customers. When you’re seeing a lot of growth, you’re going to get a lot more traffic on your site and it’s far more likely to run slowly or crash. That’s why you need to look into updating your hosting service. If you’re just paying for a cheap hosting service, it won’t be equipped to deal with the level of traffic that you’re getting.
Improve Customer Service
Customer service is at the core of all good businesses but it often suffers during a period of growth. If you don’t have a well staffed customer service team and they can’t keep up with the increased demand, the service will suffer and your customers won’t be happy. If you’re not giving great customer service, you won’t be able to turn those new customers into repeat business. Hiring new customer service staff is the most obvious way to get around this problem but it’s not always possible if you don’t have the money.
If you’re struggling to fund new employees, you should look into new technologies that could help you. Chatbots are a great addition to your customer service department because they can massively reduce the workload of your staff. Chatbots imitate humans and they can answer a lot of basic queries. This is useful for a couple of reasons. First off, customers can get an instant response to their questions. Secondly, customer service staff often spend most of their time answering the same basic questions, if you can get a chatbot to handle all of that work, your employees can dedicate their time to the more complex issues, so all of your customers are getting a speedy solution to their problems.
A massive increase in sales is such a good opportunity for your company. If you act quickly and manage it correctly, you will see sustained growth. But if you don’t follow these steps, it could be disastrous for your business.
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