Tweet

Fighting the Saw-Tooth Affect

Written by: Russ Lombardo

Article Overview: If your sales are inconsistent, going up one month and down the next, repeatedly, you could be suffering from the Saw-Tooth Affect. By prioritizing what you do and managing your resources, you can generate a more even flow of revenue and increase overall sales.

Fighting the Saw-Tooth Affect

Is this a familiar scenario? You’re this close to landing the biggest deal you ever encountered. The solution you are pitching is nearly one hundred thousand dollars and will keep you busy the better part of the long Winter months ahead and possibly into the Spring. You planned about 4 months worth of consulting and are eager to begin. Now, at the final meeting with your client, you are about to get the sweet answer you’ve been working hard to get for months. There’s not much else that compares to the excitement of getting a signature on a huge deal you’ve been working on for what seems like forever. But here you are, actually watching the client sign your order.
You’re set. You go out and celebrate that night with your spouse and talk about how much you deserved this and what it meant to your income and, of course, your business. The long hours. The pressure. The sacrifices. But now that’s all over and you got what you deserved. A huge contract that will yield a lot of consulting dollars for your relatively small operation.
The next day you order the software from your vendor. It arrives in a couple days and having already set up the first meeting with your client, you set out with everything you need to begin work. The first few weeks would include discussions and interviews for the discovery analysis. Then the planning phase. And finally the customizations, implementation, training, and roll out. The plan is perfect and you are the right man, or woman, for the job.
Reality Hits
Did you ever wake up out of a dream and have no idea where you are or how you got there? Well, that’s how you feel months later when you realize that your project is coming to a close. It is a great success. Your client loves you. The users are getting on board with the project and are very enthusiastic. The program works like a charm. Everything is coming together. Except for one thing -- Your Business! You suddenly realize as you finalize this long-term project that your business is totally stagnating, and you have no idea how you got to that point.
As if you were a prisoner being paroled after a 20 year sentence and seeing how society has totally changed in your absence, you emerge to find that you have absolutely no opportunities lined up to pursue. Worse than that, your vendors thought you went out of business. You lost all your status as a premier reseller, which means you lost all the privileges from your vendor’s reseller program; such as leads, special promotions, co-op dollars, attention from their local field representatives, and most important, a higher discount rate that is based on volume sales. You also shot yourself in the foot by not generating any leads yourself through marketing activities you could have been doing over the past several months. So your pipeline is dry, no one in the area knows of your business any more, and you are back to ground zero.

Has this ever happened to you? If it hasn’t it could. In this example, months ago you thought you were such a huge success, pulling in a large deal involving huge revenue for your business. How were you to know that at the same time you were destroying the very business you were trying to build?
What To Do?
If this, or something less dramatic yet similar, has ever happened to you, then you could be experiencing the Saw-Tooth Affect. What’s the Saw-Tooth Affect? It’s all very simple to understand. But not many businesses realize it until it is too late. Here’s how it works. Imagine a horizontal line. Above the line are marketing and sales related activities. Below the line are technical and implementation related activities. In the beginning of your sales cycle you spend all your time above the line marketing your business, generating leads, and finally closing a sale. Then you “disappear” for a finite amount of time below the line implementing the solution you just sold. When that job is completed, you go back to the above-the-line activities and start all over again. If you plot your activities across time and along this horizontal line, you get what looks like a saw-tooth. This up-and-down process repeats itself until something breaks – usually your business.
While below the line, you do nothing above the line. And, while above the line, you do nothing below the line. Pretty simple and quite binary – you do one or the other. But the problem is, when you’re below the line, no one is above the line generating business and finding your next opportunity for when you rise above the line again, or re-emerge from your project implementation.


Recommendation

This scenario is a classic example of what happens to smaller businesses, resellers and dealers who haven’t staffed up properly. To resolve this self-defeating situation you, as the business owner, may need to do a lot of soul searching to decide what it is you are really good at versus what you really like to do. You may realize that you really enjoy selling solutions and would benefit most by concentrating all your energies on the sales and marketing activities (above the line) that your company will need for success.
Let’s say that is the case and you decide to focus on sales and marketing. You’ll then need to hire staff to do all the technical work or implementations or installations or whatever. Now, you don’t go overboard and hire more people than you could initially put to work. Let’s say you remember how important it was to do the up-front planning and discovery analysis, not to mention the on-going project management. So you may first hire a project manager who is experienced with doing the planning phase. Next, you hire a technician or installer who would concentrate on implementations. Your project manager, or even you, could do the training initially until you have enough business to sustain a full-time trainer. But first things first.
Your plan will be to spend your time marketing, selling, and running your business, all above-the-line activities, while your technical people spend all their time below the line. While they are doing the implementations, you’ll be generating new business for them to implement. You will build and feed your “Pipeline”.
You have to go out and catch the lion. Then you bring it back and throw it into the tent where someone else skins the lion while you go back out and catch the next one. The question is – Do you want to “catch” the lion or “skin” the lion?” This will, and should, have a dramatic affect on your business; specifically it’s growth and success. In time, as your business continues to grow you can start hiring sales people, which will allow you to focus more on running your business, or even taking some well-deserved time off.


Summary
You have undoubtedly looked at a saw and noticed how the teeth go up and down and up and down and so forth and so on. But, have you ever noticed a similarity in how your business might be following the same pattern? Sales go up for a while, then down, then up again and down again, repeatedly. If you haven’t noticed, you might want to take a closer look.
One telltale sign that you suffer from the Saw Tooth Affect is your purchasing patterns. Do you purchase a lot of inventory every other quarter, for instance? Or, is there some sort of pattern that has you purchasing something now, then nothing for a while, then something again, then nothing for a while, and so on? These are signs that you might be going through a specific mode of operation of buying product, implementing it, then buying more, and implementing it, over and over again, instead of having a consistent and perpetual, overlapping flow of selling and implementing on a continual, parallel, and steady basis. You, personally, cannot do both selling and implementing. You never see a NASCAR driver get out and change his own tires, do you? If they did, they’d lose the race every time. You need a team of specialists who focus on their own aspect of the business.
The Saw Tooth Affect is not a healthy business model for your company since it doesn’t allow you to sustain a consistent revenue flow. The scenario discussed earlier was perhaps an exaggeration of what is happening in your business, although I have seen this exact thing happen to all sizes of businesses much too often. But even if it reflects partial reality, it is something to be concerned about. It’s all a matter of balancing resources. Some resources should be dedicated to marketing and selling, while others should focus on installing and implementing. Using the same resources to do both can cause the Saw Tooth Affect and result in inconsistent revenue and growth for your business, which can lead to a variety of negative affects including harmful relationships with your vendors and customers, not to mention your accountant.
As you plan your business’ future, be sure to take into account the Saw Tooth Affect and how you can avoid it. It will truly liberate you from the prison of inconsistent business growth.


Good Luck & Good Selling!

Russ Lombardo

Related Articles
  Steps to creating your Need Statement
  100 Ways to Succeed #79
  Losing Your Cool During Competition: Just Part of the Game or Unresolved Anger Management Issues?
  Stop Wrestling Alligators
  Be on time

Article Tags: inconsistent sales, managing your resources



Related Forum Posts
Re: Burn all your bridges inorder to succeed?? - [quote="BuzzAroundBooks":x11o039o] Some people are very self motivated, while others are lazy and need to create a sense of urgency to get themselves moving toward their goal. For instance, I was just watching a television interview on a mixed martial arts fighter who admitted to being lazy and burned all of his bridges in order to succeed. He sold all of his possessions, got in his car and left his family and friends behind to pursue his dream until he eventually made it into the UFC (Ultimate Fighting Championships). When you have literally nothing to go home to, it can drive a person to do great things. At times, burning all of your bridges is what it takes since "bonds" between you and others can actually be a distraction.[/quote:x11o039o] As my fraternity brothers and I said in college, "there is nothing that motivates us so much as the imminence of failure." For my personal fitness I definitely have to burn bridges; I need to be left alone for months in order to reach my fitness goals.
Re: When do you make someone a partner? - [quote="Kevin":i2xtlokm][quote="Alan Mater":i2xtlokm]Hi Kevin, Yes, being able to get along and tolerate them is very important. If you constantly fight and bicker and can't come to a conclusion when it comes to making important decisions, then the partnership will most likely not work out.[/quote:i2xtlokm] Well if you're always fighting with that employee, chances are you would have fired him/her long ago. However, people also tend to act differently when they're of a lower status as opposed to an equal. For instance, a small business owner may make a chef into a partner and love his personality... but then the change in power/status could reveal the chef's true colors (it's just like dating;)[/quote:i2xtlokm] Not necessarily. You can fight with someone, but still tolerate them. It depends on what the situation is and the reason for fighting. In a lot of cases, yes, they'd probably be fired, but not all. Fighting isn't always a bad thing, either. If you're fighting over decisions, that can be bad, but if it's over opinions, then maybe not. The employee could still be a good candidate for a potential partner, but you would have to weigh the good and bad of him/her. I agree, though, that when someone gains more power and respect, they tend to show their true colors. You can have two extremes, one who shows more initiative and cares a lot more about the company after being made a partner, and one who slacks off and becomes less responsible than before. "With power comes great responsibility." A partner should make this their motto and stick to it, realizing that what they do now has an even bigger impact on the business.
Re: Burn all your bridges inorder to succeed?? - [quote="Tami Szabo":3rpvrmbh]I hear what you are saying, Kevin. In other words, sometimes "creating the need" is exactly what gets us moving! I think it can work when you know you are ready and you BELIEVE you can. However, I believe it's not the only route. One way is to "create a need" without having to burn the bridge. If you are working full time, you can make "small needs" which cause you to grow at the pace you want to. For example, if someone is struggling to write a book, they might arrange a spread out series of speaking engagements on the topic of the book. The time commitment requires them to get writing the speech for each date. Then they can simply translate the speech to the book. So, how can you create a "small need" in your current entrepreneurial endeavour? This is when a Coach comes in handy as you clarify what you want and create an accountability plan to help you stay true to what you want. That's why so many business people and corporations pay for Coaching. The return on investment can be quite remarkable! Have fun thinking of ideas! Tami[/quote:3rpvrmbh] Hi Tami, I think it really depends on the individual. Some people are very self motivated, while others are lazy and need to create a sense of urgency to get themselves moving toward their goal. For instance, I was just watching a television interview on a mixed martial arts fighter who admitted to being lazy and burned all of his bridges in order to succeed. He sold all of his possessions, got in his car and left his family and friends behind to pursue his dream until he eventually made it into the UFC (Ultimate Fighting Championships). When you have literally nothing to go home to, it can drive a person to do great things. At times, burning all of your bridges is what it takes since "bonds" between you and others can actually be a distraction.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Work at home Opportunities for the Disabled

Good News Travels Fast

Is the iPad useful? One CEO tells all ....

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.