Velocity: Don't Go Fast Too Quickly
Updated: Feb 21, 2019
Time to Grow
You’ve started a business. You have product, you have some distribution. More than that, you have passion and drive. You’re selling, and demand exits. You’re ready to grow.
So what’s the best way to scale your business? Just sell your product/service to as many people as possible, right?
Well, kind of. Sales velocity is how quickly your business is selling product. Simple, yeah? There’s a bit more to it. The concept of focusing early sales efforts on your smallest viable market is one that sometimes gets lost in translation in discussions around growth strategy. So, although your ideal market may span across a myriad of demographics, geographic locations, and industries, it might make much more sense to start “small.”
Let me explain:
Let's say you just launched a product, perhaps a plant-based meat. There will be multiple ways for you to scale. For example, you may have two options: 1) to go into 5 different grocery store chains, a few stores each, and only a small number of units in each; or, 2) you have the option to go into one grocery chain, in one region, with a significantly higher number of units in each store. Which do you choose?
More stores in more chains might mean more initial exposure. However, more initial exposure is not necessarily synonymous with sustainable sales numbers. If you are able to start narrow, and identify/master your early market, you can begin to build your “sales velocity story."
Try to grow as fast as possible, while being able to control / increase that growth. The point being, the minute you're not able to control the growth, you may be putting your fate in someone else's hands (who might be less passionate/able) to grow your brand. Although it may seem counterintuitive, a strong sales velocity narrative will carry your brand and product past the “novelty” phase and show there is solid consumer demand for your product. This will build a solid foundation for sales growth and expansion.
Capturing your first true “sneezers,” the first 1,000-5,000 loyal receivers and advocates of your product, allows you to begin building a strong brand presence that presents incredible value to future investors, distributors, retail chains, and food service establishments. Here's a suggestion: treat these initial advocates of your brand not as your high-level customer segments, such as flexitarians, vegans, etc. These loyal receivers will be "micro-segments," such as a "late 30's on-the-go Gen-X moms who are buying for her kids, and spare no expense for the healthiest option." Get specific with these people; know exactly who they are. Even better if you can think of your "perfect customer" as someone you already know.
So, selling more product in existing locations, increasing customer demand, and bigger orders through existing distributors will all signal strong velocity. Then -- you can use the velocity story to expand, secure additional distribution and retail/food service locations.
Why Velocity REALLY MATTERS?
Velocity proves that your product can sell consistently, and that consumers will have continued demand that drives repeat business. Investors are looking for brands they can hold long-term trust in. Retailers want to sell "no brainer" products that fly off their shelves. Showing strong velocity in existing channels is the first fundamental step in showing that your product can succeed.
Need help spurring velocity in your current sales channels? Sprouted Ventures is a Growth & Acceleration Collective in the plant-based meat/dairy & biotech realms; check out www.sproutedventures.com to learn more about how they can help you reach your global impact goals.