Managing revenue is often the biggest challenge for entrepreneurs and small business principals. Its hard to be a focussed on sales when delivering service to customers is a full time job. Unfortunately, somebody has to do it, and that somebody is usually the business owner.

The individual entrepreneur won’t want, or need, to manage his sales process in the same way as the big businesses – but there may be some value in understanding how sales teams are managed. If the small business owner can adapt the big business approach to suit his own operation, he can have more confidence in his ability to manage income, and more time to deliver the effort which actually earns it.

In this section we’ll try to explain how the professionals manage the flow of revenue into the business, so the small business owner can develop his own processes.

We’ll describe the job of managing revenue in terms of three roles

• Sales Director,
• Sales Manager and
• Sales Rep.

Of course, most entrepreneurs and small business principals, fill all three of these roles.

It’s hard enough for the sales professionals to get these right, even with training and experience. For the untrained entrepreneur, with too many other things going on, it must be close to impossible. An understanding of these techniques should be a big help.

Here’s templates for the way all top professionals we know do the job.

Sales Director

The Sales Director’s responsible for Pipeline Management i.e. winning future opportunities, in total and in time series. Sales Forecasts are based on 0pportunity values, weighted for the likelihood of success, calculated as the sales value multiplied by the probability of winning (%age), and related to the reporting period.

A typical pipeline summary report might look like this:

Detail	30 days	60 days	90 days	Later
Forecast	78,000	65,000	67,500	40,000
Budget	90,000	100,000	110,000	250,000
Challenge	12,000	35,000	42,500	210,000

in this case, the revenue forecast is below budget. The Sales Director needs to increase the probability of the deals forecast.

He can call the Sales Manager and ask him to review each of the prospects, seeing what they can do to increase the probability of winning. (He can also increase the number of deals in the pipeline – he should call marketing and send the sales rep out prospecting).

They’ll look at the detail of the pipeline to see which deals they should focus on.

Deal	Value	%age	30 days	60 days	90 days	older
ABC Corp. Inc	100,000	70	70,000
BCD Inc	50.000	50		25,000
CDE Inc	250,000	25			67,500
DEF Co. Inc	40,000	20	8,000
EFG Corp Inc	100,000	40		40,000		40,000
FGH Inc	30,000	60
Totals			78,000	65,000	67,500	40,000

If the whole year is in surplus he has a different set of choices. Either he can expand the business to accommodate the extra business available, or ask the sales guys to back out of the low probability deals to concentrate on the ones they can get, and minimize cost of sale.

Sales Manager

The Sales Manager will focus on each opportunity, the probability it can be won, and what needs to be done. His job’s about helping the sales rep make sure all the bases are covered.

Experience tells him there are fundamentals in every sale which need to be covered. His job is also about helping with sales strategy, and with aligning the business resources, to support the sale. Perhaps expense needs to be approved, technicians assigned to help, and even senior management need to help out.

The business expects the sales manager to make sure this additional involvement won’t be wasted. Nobody wants to spend money on a sale that they aren’t going to win.

He’ll want to review the sales strategy and actions, checking on the fundamentals, identifying other actions that could help ensure success and evaluating the risk areas. He will need to see if these risk areas can be addressed and negatives turned into positives. If they can’t, for some reason, then maybe its time to cut the cost of sale losses and walk away from the deal.

He’s going to be interested in an Opportunity Review, something like this,

Qualification Process	Yes	No
Business Imperative identified	10%
Confirmed available budget		0%
Understand the decision process and met the decision maker	10%
Proposal agreed and submitted	10%
Customer prefers our offer	10%
We have coach on the inside		0%
Customer meets deliverables, on time	10%
Contract terms agreed		0%
Delivery/start date agreed		0%
Invoice paid		0%
%age Probability	50%

In this simple example every No increases the risk (and reduces the probability %age) by 10%. In this case the weighted value of the opportunity is 50% of the forecast value. The Sales Manager needs to work with the Sales Rep to turn each No into Yes, to increase the probability of winning the deal and increase the weighted value of the forecast.

With a Yes answer to all questions this deal is guaranteed to come in. As it is, if the estimated value of the deal is $100,000 the weighted value is only 50% of that. The figure that goes into the Sales Director’s Pipeline is only $50,000.

The Sales Manager can increase the figure in the pipeline to $70,000, if he can confirm there is a budget in place, and find somebody in the customer’s business to coach them in the sale.

Sales Rep

On the other hand the Sales Rep is much more interested in following a proven formula to avoid having difficult conversations with his manager.

His job is delivering the Sales Process, which might look something like this

1 Qualify the opportunity

• Describe the Business Imperative

• Why is the customer interested in our proposal? If there’s general support in the business for the purchase/investment, there must be a reason which the buyer can describe. Understanding this will tell us a) if the project is likely to go ahead, with somebody and b) how to position our offer. The sales focus needs to be, not on what the customer says he wants, but on what benefit he expects to come from it.
• Confirm an adequate, committed budget
• Is the cost of the project already built into the business plan? If so how much is it, and are we prepared to deliver at a cost on or below budget?

• Confirm the decision process

• Who will make the decision and how? Which steps does the buyer foresee in the evaluation and selection of suppliers. When will these be completed and by whom? Who else will the buyer involve in the process and who will be responsible for making the final decision?
• Evaluate the competition. Who else will be bidding? What are their strengths and weaknesses. How does the buyer rank us versus the competitors?

• Identify our coach

• Who in the business will coach us to win, keeping us in touch with events as they occur and supporting our offer over the competitors?

2 Bid/No Bid Decision

• Is this a bid we can win?
• What will we offer for how much?
• Why will the customer buy from us?
• What will the competition do to take the business from us?
• Is this the best use of our cost of sale budget?

3 Agree and complete the Buy/Sell Process with the customer.

How will we:

• Understand the requirements.
• Suggest variations to add more value.
• Confirm our capabilities to deliver.
• Agree costs and contract terms.

4 Agree the Proposal

• Defining what the customer wants.
• Defining how we will deliver it.
• Costs and contract terms.

5 Close the Deal

• Get the customer to commit to proceed.
• Get the Budget holder to commit the money.
• Agree a start/delivery date.
• Get the customer to commit internal resources.
• Agree and sign contracts.

The Sales Rep might have a standard “form” he uses to record his sales process. It could look something like this.

Phase	Milestone	due date	Complete
Qualify	Describe the business imperative Confirm the decision process Identify our coach
Bid/No Bid Decision	Is this a bid we can win? What will we offer for how much? Why will the customer buy from us? What will the competition do to take the business from us? Is this the best use of our cost of sale budget?
Agree/Complete the Buy/Sell process	Understand the requirements. Suggest variations to add more value. Confirm our capabilities to deliver. Agree costs and contract terms.
Agree Proposal	Defining what the customer wants. Defining how we will deliver it. Costs and contract terms.
Close the deal	Get the customer to commit to proceed. Get the Budget holder to commit the money. Agree a start/delivery date. Get the customer to commit internal resources. Agree and sign contracts.