New Quarter

It will be a new quarter tomorrow and a new tax year shortly after that. The Government keeps revising upwards the growth in the last quarter as we approach the election. I now understand they are claiming growth of 4% for the 3 months to December 2010. This may or may not be true, we all know what can be done with statistics.

What has struck me over the recession is the disparity of performance in specific sectors between different businesses. It has, on reflection, been a business bloodbath. Not as bad as it could have been but nonetheless bad enough.

What I mean by disparity is that similar businesses within a stones throw of each other have seen significantly different performances over this last year and I have been thinking about this a fair bit.

I speak to a very large number of small businesses over the course of a month in a mixture of sales and service roles: sometimes I am selling, sometimes I am doing. What I have found is that businesses can be classified into 2 very distinct groups: ones that sell and ones that don’t. This sounds blindingly obvious, but actually it is not.
When times are good and customers are queuing up at the door, it is very tempting to take orders, fill capacity and fool yourself you are running a good business. It is only when times are bad and reality bites that businesses operating like this find out, to the cost of all concerned, that they are not good businesses at all and the reason is as follows.

If unlike the above business, you are a business when times are good and the customers are queuing up at the door, has selling mechanism, at even a small level, then when things are bad you have a sales mechanism to fall back on. That is, you simply ramp up the sales operation to fill the capacity slack.

So type one business is an ‘order taking’ business not a ‘selling’ business and this type of business has suffered very badly in the down turn. The second type of business will also have suffered, but not nearly so much as they have been able to ramp up the sales operation to fill the gaps.

If the government is correct, then significant new growth lies ahead from 2011 onwards – a good time, if any there was one, to ramp up the selling and become a selling business.