I love working on cash flow management problems. I approach cash flow management through two different lenses. One lense is upstream cash flows and the second is downstream. Most articles on cash flow directed toward small business owners are downstream in nature such as improving AR collections and speeding up inventory turns. I prefer focusing on upstream cash flow–marketing and sales.
Every CFO Should Understand Sales Management
I was forced to learn sales management early in my consulting career because most of my clients were (and still are) professional services firms. Yet, we stunk at sales management. No systems, no processes, and disciplines were painfully lacking with CRMs we were spending big bucks on.
Eventually, I self-taught myself the V.P. of Sales function for these businesses. But I first needed some help from some great authors.
These Three Books Are All You Need
My favorite of the three books is Predictable Revenue by a longshot. While published in 2011, the main message is as relevant today as it was when Aaron Ross released his book after his successful stint at Salesforce.
My biggest takeaway from the book is that salespeople should not be in the prospecting business. That’s for marketing and SDRs (sales development reps). If there were three words I could use to describe this easy-to-read book, they would be process, process, process.
A few years later, I was skimming a Verne Harnish newsletter. I’ve been a Hubspot fan for years because they put inbound marketing on the map. Many of my clients have used them over the years.
When Harnish mentioned a book by Mark Roberge, I pounced on it. The title is The Sales Acceleration Formula. I listened to the book, so I’m missing notes. But here’s what I loved about it. Mark was hired to run Hubspot’s first sales organization. He had never done that before. His education was in engineering, as in MIT.
Yet, under his way of finding, getting, and developing sales team members, Hubspot sales jumped through the roof and then beyond.
Mark’s message is similar to the one in Predictable Revenue – process is crucial. But Mark’s book took process to an entirely new level. Everything was tracked. Even tracking on who were the best sales candidates were tracked too.
Don’t read one or the other, read both, and in the order listed.
Finally, if you liked The Goal, then I recommend The Cash Machine. The authors use fiction by applying the theory of constraints in a sales operation. For the most part, they nail it. The last couple of chapters included a few vagueries, but overall, this is a great supplemental read to the two books above.
An Honorable Mention
The last book I read in this narrow genre of business books was The Sales Development Playbook. There might be a temptation to get this book first. Try not to do this. This is a fantastic book of tactics and mini-strategies for the sales team. Still, Aaron’s and Mark’s books set the table for this actional book.
Cash flow management is more than optimizing AR and inventory. It’s far more than monitoring cash purchases and making adjustments when needed. When cash flow issues exist, always look upstream first. Take a hard look at the sales function. You might just find the books above could open the cash floodgates.