Sales Stuck in Neutral? Why You Might Be Getting in the Way

Last Updated Jul 29, 2010 3:50 PM EDT

It's a hurdle that nearly every new venture hits, at one point or another. You're growing, growing, growing and then... you stop. I've thought a lot about what exactly limits how large a business can get and, after much trial and error, I think I've found an answer: You do.

I started my research company from scratch, and we did $150,000 in revenue in our first year. I say "our" as if there was a "we," but in actual fact, the first year it was just me in a spare bedroom of a house my wife and I rented when we first got married.

The next year, we doubled to $300,000, and there really was a "we." The next year, we hit $750,000; the next, we broke through the million-dollar milestone and hit $1.5 million. The following year, we got to $2.2 million, after which we hit $3.3 million. Then suddenly we stopped growing. We couldn't get beyond the $3.3 million mark. For three consecutive years, we were stuck at $3.3 million.

I started to get frustrated. Having enjoyed a great growth trajectory, I came to expect that we would grow each year. As we became more entrenched at $3.3 million, I started working even harder, rising at 4:30 a.m. most mornings and working well past dinnertime.

Finally, I realized there were no more hours that I could personally work and that, in fact, we had reached a ceiling that we couldn't penetrate without making some fundamental changes to the way I ran my business.

Up until that point, my management style was best characterized as a funnel. Everything that flowed in from my employees eventually funneled down to me personally. I was approving every proposal, attending every key sales meeting, appeasing every angry customer, screening every new hire, and signing every check.

I was a control freak of the highest order and just couldn't let go. I constantly felt my business was one misstep away from ruin and I took it as my personal mission to direct everything.

I realized my need for control was choking my business and set out to make three difficult changes:

1. Stop customizing
First off, we switched from doing custom research, which required me to personally get involved in writing a unique proposal for each client, to having one standard research offering, which we flogged to anyone who would listen.

2. Package it
Once we standardized our offer, I created a brochure and printed 1,000 copies. I figured by sinking some money into professionally produced marketing materials, I would be less likely to change the offer -- kind of like buying a Bowflex system while watching late-night TV after polishing off a bag of Ruffles. For me, the investment in a flashy brochure meant I would actually try to stick to my plan.

3. Hire a ringer
Next I hired a talented salesperson. Her compensation ended up being more than double that of our second highest paid employee. It was a big nut for a small company, but having a sales guru helped ease the load on a number of levels: 1) She was doing a lot of the selling; 2) her customers went to her when they had a problem, so my time spent firefighting went down; 3) employees started to see her as a resource to get their questions answered if I wasn't around.

For an alcoholic, the solution is simple to say and hard to do: Stop drinking. It's a similar dilemma for the control freak. The steps above are easy to write but required years of false starts and relapses before I finally kicked my need for control.

In fact, the year I made these changes, we actually went backward, just cresting the $3 million mark further undermining my confidence. Despite my concerns, I stuck with it, sensing the changes needed time to steep. The next year we made $4.2 million. The following year, we hit $5 million and had momentum. We had finally broken through.

(photo courtesy of Flickr/cyrillicus)

  • John Warrillow

    John Warrillow is the author of Built to Sell: Turn Your Business into One You Can Sell. He has started and exited four companies. Most recently, he transformed Warrillow & Co. from a boutique consultancy into a recurring revenue model subscription business, which was acquired by The Corporate Executive Board. Watch this video to hear John's thoughts on starting and growing a business you can sell.

    John and his book "Built to Sell" have been featured in CNN, MSNBC, Time magazine and ABC News. John was recognized by BtoB Magazine's "Who's Who" list as one of America's most influential business-to-business marketers.

    John now divides his time between homes in Toronto, Canada, and Aix-en-Provence, France. He is a husband and father of two rambunctious boys.