Precise and accurate estimation of risk and security is the foundation of success for entrepreneurs. What this means is that the entrepreneur evaluates each risk taken against the security of the enterprise and his or her own position. Successful entrepreneurs always approximate the right balance between them, so that the existing activity and organization is never endangered by the risk—and the risk taken is, in the majority of cases, rewarding.
In that a salesperson is in actuality an “entrepreneur in the enterprise,” it will be seen that successful salespeople are also always weighing the risk/security ratio. How much risk with my own personal time and resources could I take on this sale? How much profit will be made from it? How much of a risk will it be to the company, versus the potential reward if it closes?
Methods of Calculation
Many entrepreneurs—and salespeople—calculate this balance fairly instinctively. They have to; it’s a competitive world and the faster you are at gauging opportunity, the more opportunities you’ll land ahead of the competition. But instinct only carries so far, especially in the business world where it’s a numbers game. Given the sheer volume of opportunities and the speed at which they must flow through a sales pipeline for a company to maintain advantage, there comes a point at which the assistance of automation is required.
At that point, the choice of software tools is of considerable importance—and is often missed due to the lowered priority of IT purchases and decisions in companies. The tools chosen range from simple or even complex contact management to CRM (customer relationship management) software that might to some degree track opportunities but gives a poor overall view.
The major problem with such tools is that the “full picture” of risk versus security can be totally missed. What level of risk have we taken in the past that resulted in closed, profitable sales? What types of risk have we undergone that ended up in missed opportunity or failed closes? Which risks were too costly to the company when compared to the profit made from the sales? And most importantly: what is the right range of balance between risk and security that we must fall into every time?
Entrepreneurs and The Right Tools
In order for salespeople to fully become the entrepreneurs that they are, they need the right sales tools. Those tools are encompassed in intuitive, flexible CRM applications.
CRM that is logical and follows the company’s actual sales process means that the level of risk coupled with the value of opportunity is properly rated—in one central location. Sales reps can quickly look over their entire sales pipelines and see the successes they have had. They can readily view the risks they have taken that were worthwhile, and those that weren’t. They can then make decisions on hard data rather than partial information and a measure of guesswork.
Such CRM also makes it possible for sales management, company executives and financial officers to accurately weigh the risk/security factor as it affects the entire enterprise—again, from one central location. As it happens this is the location into which the meaningful data, from the sales department itself, is recorded.
Salespeople have the minds and hearts of entrepreneurs, and weigh risk against security pretty accurately every time. Arm them with the right tools and the sky’s the limit.
Watch for more articles in our series on salespeople as entrepreneurs.