In business, there are many reasons that sales can drop. Sometimes we know those reasons, and sometimes you’re left sitting there, wondering what the heck you did wrong, or what’s going on. In this blog, I’m going to cover some different reasons that sales can drop. But more importantly, some tips on managing that situation.
Why Sales are Down and Tips to Do
1. You’ve dropped the ball.
Simply put, you’ve stopped marketing, stopped being proactive, or just haven’t been all over your marketing plan. I sometimes see with new clients, they are riding what I call the roller coaster. They get busy, stop marketing, then get quiet, then resume marketing and those ups and downs continue indefinitely. Roller coaster rides in business just are not good for stress, cash flow and even the team. You need to be realistic that you have competition and you can’t just sit and wait for business to fall in your lap. The world is shrinking, technology is changing, AI is taking over many tasks, so you need to be all over your marketing to ensure you’re getting found, especially getting found online.
TIP: The tip here is to have a documented annual marketing plan, which you keep onto every week, ensuring things are happening, and whilst you might take your foot off the pedal just a tad when busy, don’t stop altogether. Track lead generation methods, ensure you know what is working (or not) and ensure your conversion rate is A1.
2. It’s seasonal.
Many businesses are affected by the seasons in their industry. Lawn mowing guys and pool cleaners are quieter in winter. Retail booms leading up to Christmas, but can get quiet afterwards. Bookkeepers and accountants are busy around the end of the financial year or BAS time, but can have quieter periods too. For others, they have quiet times of the day, or might only run to school terms. Aircon people are quieter in winter, so they often promo winter deals. Pest Controllers are fortunate, in that whilst cockies tend to be a little less prevalent in winter, the rodents come out to play, so they just need to switch their marketing focus.
TIP 1: If you have regular seasons, find tasks you can do outside busy periods. Lawn mowers might also gurney driveways, or trim hedges, which can be done at times of the year when lawns are growing more slowly.
TIP 2: If you know your January is dead, then do two things. Firstly, have your holidays at that time, and embrace the quiet. Also, in your budgets and finances, plan your income for 11 months, which will cover 12 months of expenses. Knowing income is super low at a period of time, and factoring that in removes the stress and improves the cash flow.
TIP 3: If you’re affected by times of the day work, or school terms, look to diversify a little. Even supplying services to say different time zones, or expanding services so you don’t rely only on school children in school terms, can make the difference.
3. You were away on leave.
Every business owner is entitled to a holiday and having some time off. The trick is to plan for that time and put money aside in order to enjoy the break, without stressing that you’re missing work, income or opportunities. When you’re on holidays, ideally you shouldn’t be working. If you must monitor things, because you’re a solopreneur, then limit that time, perhaps 1 hour first up in the morning, and then put that laptop or phone away!
TIP: Save funds and put them into a separate account; even call it your ‘holiday account’ so you know you’ve got money set aside to not only enjoy the holiday but also know the business bills are being covered. If you’ve got a team, then train them up so things run smoothly in your absence.
4. You were sick for a long period of time.
I know small business owners who, if they get sick, everything comes to a crashing halt. It’s just them who work in the business, and if they can’t work, they don’t earn. If you do physical work, or have to drive, then this becomes more serious. I know a few trade businesses that were panicky and were trying to stockpile fuel when fuel became an issue earlier this year.
TIP: Think about the threats to your business – loss of power, loss of fuel, loss of you. What can you do to mitigate those issues? For yourself, it might be having sickness and accident insurance in place, or having someone you can call on to help out. We can’t stop everything from happening, but a good many things can be improved upon with some pre-thought and planning. Perhaps adopt a little of the ‘preppers’ mentality and work out what you can do to keep things going. For example, I have a power bank always fully charged; if the power goes out, I’ll be good for several days with my phone. Laptop, won’t work so well, but I do have email on my phone, so I can manage.
5. It’s economical.
Economics is a trend. We have poor economic times, where things are not looking so great and business confidence is down. Generally, these are the times where we see some businesses drop off and sadly, even close or go under. Having said that, the strong endure and sometimes even prosper.
TIP 1: Run your business smart from day one. Great marketing, effective lead management and excellent onboarding. Great customer service should occur ongoing, so that reputation and client effectiveness aren’t hindered if the economy is struggling. If you are smart in business and savvy in how you do every step of your business, then you might see a slight dip, but it won’t be much. You might notice some of your competitors are no more, so with less competition, you don’t notice a drop.
TIP 2: Ok, blatant promo – but my tip is, get an experienced business coach like myself! 😊
6. Spending is paused for specific reasons.
There are absolutely times of the year which are affected by external factors. Leading up to an election, it’s always quieter. People hold their breath, waiting to see which party gets in – although reality is that shortly thereafter, they go back to their ways of spending – for the most part. Another time that investors, entrepreneurs and savvy business owners pause any major spending is leading up to the May Federal Budget. These people want to see what major rules will change, what opportunities are removed or added and often will then discuss strategy with their accountant, prior to embarking on major projects. This last Federal budget, however, I feel affected so many more people, as it was a doozy that has reverberated through the country with extreme loss of confidence. Another time that things pause (similar reasoning) is leading up to elections. In respect of the end of the financial year, this can mean increased spending to use up budget allowances, or pauses, until the new budget is released. It really does depend on your industry.
Other specific reasons can include natural disasters, like floods or storms, COVID, to mention a few.
TIP 1: Factoring for a quiet May can be done in your budget, as you can factor if you likely have a big June or not.
TIP 2: Again, having savings takes off the pressure and where possible, keep debt to a minimum. Consider overhead expenses and what is actually necessary, in good times and bad. When making decisions, such as taking on debt or buying a large piece of business equipment, don’t just think about affordability in good times; consider the impact in quieter times as well. How often would that equipment be used? If not that often, is hiring a more sensible option?
7. People pause spending due to personal circumstances.
This is something you can factor into your business. If someone loses their job, they will spend less. If they are getting married, spending in that area will increase. Even wet weather can mean people are less inclined to get outside and visit the shops – but alas, now with so much online shopping, that’s not really an issue. One friend, who is an insomniac, said their spending time is 3am!
TIP: Be aware if you are selling a high-ticket item, that may not be in the budget of the average person who is pausing their spending; however, a range of products might still be relevant. Having said that, if someone is ‘on a budget’ but they want what you have, they will invariably find a way of making that purchase happen. So it comes back to smart marketing that engages your audience and makes them want to buy, even if they shouldn’t. Go on, you deserve it! 😊
As you can see, many of these factors are somewhat out of our control, but how we react and manage those circumstances is absolutely IN our control. As an experienced business coach, I work with clients on current challenges and problems, but more importantly, I’m always looking to set things in place which reduce (and even remove) the challenges and difficult situations, before they even arise. That is, being proactive, rather than only reactive. If you’re interested in business coaching and would like to access a sample coaching session, just reach out to me for a Sample Coaching Session.
