Understanding the environment in order to increase sales

As a start-up advisor I get asked a number of questions which I thought I should answer in this week’s article. Running a business at a time when customers are hard to come by can be difficult unless you are selling something that they need. This is very important and shows the importance of spending time on your value proposition when it comes to investing your time and money in establishing a start-up business.

I often hear that Zimbabwean managers can face any challenge because of the firefighting they have to do in their various areas of responsibility. Finding and keeping customers is not easy. Due to this firefighting process however start-up managers spend very little time understanding the workings of their industry and how to capitalise on the peculiarities of their industry.  Needs change so do budgets! What someone can afford to buy today is not the same thing they can afford to buy tomorrow and so on.  What you have in stock today determines whether you can sell or not.

The unfriendly environment calls for an unfamiliar approach to closing sales and keeping your head above the water. A business which has no sales fails in no time because it cannot meet its costs of operation. More importantly a business that does not know why it exists has no future, as it has no targets.

As an entrepreneur you must learn quickly to adjust your model to adapt to the changing market conditions. You have to learn to blend-in and offer what the customer’s wants at a price they are willing and able to make a plan to pay. You might have the best products but if your price is not right and is not being shown to the right customer it will stay on your shelves.

Turning to the issue of pricing how does one price their product in an environment where prices are constantly changing? This subject is too big to address in this article but serious entrepreneurs will spend a great deal of time in the area because it’s very important. When resources are scarce customers tend to make their decisions based on what is in their wallets. To be a successful seller you must be aware of various signals from your customers and the important dates in their calendars.

While most businesses are struggling there are some businesses that are failing to meet demand because customers are buying more of their products than ever before. Business for them has never been this good. Yet in the same vein there are some businesses that have never been experienced a downturn are on the brink of collapse. Why is this?

We have business cycles and seasons and a business must be able to plan and take advantage of such cycles. An entrepreneur who specialises in flowers and gifts for instance says they make over a third of their annual sales in February of each year due to Valentine’s Day. Similarly tobacco processing companies experience such cycles as their crop is seasonal. If you don’t measure your sales and the cycles you experience its time to do so because such information is important and will help you to decide what to stock and when.

Temperatures have dropped in the last few weeks and I am sure sales of coffee, tea, sugar and milk will be up! If you are in the coffee shop business surely this would be a time to promote your latest coffee recipe. Customers are more likely to respond to such calls because it’s cold and if they have some money in their pocket it makes sense to grab a cup of coffee. This is how you should think as entrepreneur. You must be alive to the changes happening around you well before they happen and take advantage of them.

One the easiest thing to take advantage of is seasons. As a start-up how much time have you been taking to understand what sells when and why? Seasons come and go shaping consumer tastes and habits. You don’t see ice cream selling in buckets in winter. Winter clothing sells fast in winter.