Business operations require a careful analysis as we close out 2007.
Almost everything we do leads us to talking about money and costs — competitive bidding, accreditation, changes in reimbursement, etc. We continue to deal with high gas costs, rising health insurance costs, expensive new trucks and even outrageous heating bills for our offices (air conditioning if you are sitting in South Florida with me).
We also realize that sales and salespeople impact every aspect of an HME operation. It's the sales they create that make paying those bills possible and more tolerable. The more we sell, the better off we are financially and psychologically. No one feels motivated to work for or sell for an organization that is not successful.
Given that need for success, we need to consider how we are going to judge and evaluate our sales operation. What operating model are we going to use to determine success and how will we institute a profit improvement management program? Now is the time to look at all of these issues as we begin strategic planning for what could become the most interesting year in home care history.
There are a variety of performance parameters you should consider as you take a closer look at your business and, especially, your sales operation. Some of these include•sales growth per year, rental mix, average sales per transaction, sales per retail square foot and product line mix (retail sales, rehab sales, rental sales, respiratory, home infusion, and service and repair).
You may also want to consider other operational performance parameters that could include (but are not limited to) revenues by employee, stops per driver per day, inventory turnover (x times per month or quarter), days outstanding and operating margins.
Sales, unfortunately, is about the numbers.
The numbers are not subjective documents but observable facts about your operation. They provide a means to understand what is happening in your company, and, possibly, if changes are not made, what will happen again and again to hurt your business.
If you are going to achieve a competitive advantage in sales, you must:
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Manage by the numbers. Use some of the parameters listed above. Discuss the numbers with your sales team, review them at staff meetings, and review suggestions for improving the numbers.
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Enhance productivity. Review territory management plans, account call frequency records and delivery problems due to poor logistical planning. Learn how you can get the most of your time, day and your colleagues.
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Embrace new technology. Review the latest in technology from GPS systems, sales tracking programs and referral source communication options. Saving time and improving communication will ultimately improve profits.
You may need to expand your product lines into areas where there are improved profit margins. Ensure that every salesperson understands such issues as profit margins, the frequency of repair costs, product-return costs, etc.
You may need to make some hard decisions:
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Understand the great salesperson can always do more, and do not to get too attached to the non-producer with the wonderful personality.
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Avoid the continual expansion of sales space. Ever wonder if you could make the same amount of money in less space or with fewer facilities?
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Manage your assets by considering what products you might not want to carry next year and evaluating the turnover of products you now sell. Understand product profit margins, and note those products that do not have high margins but do attract retail customers to the store.
As a sales manager and/or business owner, your prime responsibility is to ensure the financial stability and growth of your sales department and the long-term viability of your business. Sit down and review where you've been so you can make a plan for where you want to be.
Twenty years ago a home care executive told me that “what gets measured gets done.” As a manager or owner, take the time to decide what you will measure. Take hold of your operation, and enjoy a fantastic 2008!
Louis Feuer is president of Dynamic Seminars & Consulting Inc. and the founder and director of the DSC Teleconference Series, a teleconference training program. He can be reached at www.DynamicSeminars.com or by phone at 954/435-8182.
