Most sales people answer the question “What if you sell more?” with a cheer. Most accountants would add up the additional revenue and profit. And, often, the Operations resources would be glad the leaders are in a good mood. But does anyone know if we are set up to successfully handle increased sales if they occur?
There are several questions to consider in evaluating ‘what if you sell more’. It all boils down to capacity.
- Machine Capacity – Do you have the machine capacity to keep up with the increased demand? If not, can you retrofit a machine? Can you use a machine from another facility?
- Labor Capacity – It is very frequently a significantly bigger issue than anything else. Do you have the people to turn up the volume? Can you add another shift? How about overtime? Do you have a partner who can supply temporary workers as needed? If you have the sheer numbers of people, the question becomes, do you have people with the appropriate skills for the specific products being sold?
- Supplier Capacity – Even if you have the manufacturing and logistics capacity, it won’t matter if your suppliers cannot keep up with demand. What are your suppliers’ expectations? Do they have flex capacity? Will they prioritize you?
- Cash Reserves Capacity – None of this matters if you do not have the cash reserves or liquidity to fund sales growth. Aggressive growth sounds like a pleasant problem to have vs. cutting back. However, if you cannot fund growth, it can quickly become unpleasant.
- Infrastructure Capacity – Will your internal people, processes and systems support the increased demand? Will increased volume lead to decreased margins? Customer complaints? Loss of visibility? Or can you scale effortlessly?
As much as selling more is a great problem to have, it pays to think about it before you run into it unexpectedly. Some companies get carried away with rules and regulations designed to stifle Sales. That doesn’t work either!
Instead, think proactively. Plan for the likely. Think through contingencies. Remain light on your feet. And, you’ll be able to answer the question, ‘what if you sell more?’ with a resounding “YES!”.