Spot Negative Sales Momentum

Setting a Budget (1)The death knell for any new venture is when a sales trend starts to reverse itself, falling downward. Negative momentum can kill any company and a start-up is more vulnerable to changes in sales momentum than other, more established firms.

The only exception to the negative sales trend rule is seasonality, where sales trends fluctuate based upon certain times of the year. Its important for managers in a new venture to understand any cyclicality or seasonality associated with its business. Its likely that other industry participants combat this seasonality by raising prices during peak season to better weather the storm during the “off season”. In order to be successful, your venture will likely have to do the same.

The only way to potentially combat negative sales momentum is by keeping a sharp eye on sales. Identify any trends underlying your venture’s performance. Act and react at the first sign of weakness. If you spot nascent negative momentum, be proactive offering new promotions or price discounting to try to stem the tide. If this doesn’t work, quickly reach out to members of your customer base that haven’t used your product or service in a while. See what is keeping them away from repeat purchases.

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