Who knows best when it comes to growing your business,
your Finance or Sales Manager?
Here’s my take from a Sales Manager’s point of view…. and to balance it out I have also invited a Finance expert, Michelle Reynolds (Collaborative Business Support Ltd) an associate that I respect greatly, to contribute to the argument… or should it be?
I was lucky to have tickets to go to the Ryder Cup at Gleneagles this year and although I might sound American, I was supporting the European Team. This was much to the dismay of my unusually dressed patriotic friends from across the pond. Despite all the jeers and the very rude texts I received, I remained true to supporting what should have been my golfing enemies.
This is what I want to discuss here, and I would very much like feedback on what you think. A company is driven and grows through exceptional management support as much as through great employees, products, services, business plans, focus etc.
Rivalry in any business can challenge ideas and this is very positive, it’s when the rivalry gets out of hand that it can be damaging your business growth.
For example, I have worked with many manufacturing companies where Quality Assurance and Operations feuds have literally lost companies massive £1M+ accounts due to forgetting who the customer is and regularly delivering either out of spec goods or a very slow and disruptive service.
So if I really wanted to grow my business would I take the advice from my sales manager or finance manager if they disagreed with each other?
My sales argument to grow: The sales manager will need investment in marketing and sales tools such as a good CRM, laptops and training if they are serious about growth. They may even require new or better staff to close the deals. Research, measurement and best practice should minimise the risks and optimise profitability. However, this may be quite an investment and the generation of leads, slick software and sales staff will not automatically ensure high value sales growth. It certainly will not ensure increased profitability, especially short term. But, without the investment sales growth may never be achieved and the company may stagnate and possibly fail.
Michelle’s Finance argument to grow: Traditionally companies associate growth with “selling more stuff” – well you can sell as much as you like but if the “stuff” makes no or low margin then your business will never grow. In addition to that, the company can be quite disparate in its approach, each department having its own agenda, which again will restrict growth in the long term. For growth to work, the entire company needs to have access to relevant financial information, which enables each area to make informed decisions.
The decisions made must focus on getting the maximum return for the investment made – and that investment includes sales personnel, training, systems, and marketing – any cost or time must be spent selectively. It is also key that the cost and benefit is measured regularly. I have no hesitation spending money – providing that in the medium to long term it produces profitable growth.
In my experience of working with Finance Managers like Michelle, it’s when we work together that we can really make a difference.
Discussing the financial position, business objectives and accurate sales forecasting in a constructive and positive environment will yield the best possible sales growth scenario with the least amount of risk to the business.
In order for a business to truly grow, Ryder Cup Rivalry (including rude texts!) and any negative culture need to be removed from the company.
So… our answer is take advice from both, as they should reach the best advice for your business in agreement. And if they don’t, you should seriously consider why and what can be done to improve your company culture so that you get the best possible advice every time.
Areas where cooperation really works with Finance & Sales
Product offer – There are still many Finance Managers that won’t tell the sales team product costs or profit margins. They have mistrust and believe that the sales guys will sell at the lowest possible price with this information. This may be true in some cases but without any information, the sales teams will naturally sell the easiest less hassle sale, which may end up being the least profitable.
If both parties cooperated and shared information this would be eliminated and the best products and potential clients for the market would be sourced at better margins.
Pricing & price increases – Pricing should be dictated by market demand and increased through adding value (not through finance’s optimisation of GC% exercises). Customer & company price points need to be identified.
Without proper information on profitability and the marketplace, this could be a very blind exercise and cost the company dearly. It’s now time to be thinking about price increases and if this is planned and managed realistically with both the finance and the sales departments the increase will be better received by the customer base.
Credit control support – It’s not sales’ responsibility to collect debt and they are not the first port of call for this. The sales team are responsible for collecting orders and building good relationships with customers. However, if payment by a customer is really becoming an issue, then it is the responsibility of the sales function to support credit control as no payment is worse than no order!
Expenses – This is an area that many companies do not measure or structure well. Sitting down with all managers of the company and deciding set rules on expenses will not only decrease costs but also give staff guidelines to what is expected of them. Examples could be setting a ceiling on hotel costs and what is acceptable to claim when eating out or when entertaining clients.