Is it a sales problem or a delivery problem?

Almost every owner who telephones us has decided which one it is before they pick up, and about a third of them have decided wrong. It matters because the two problems are treated in opposite directions: one gets solved by putting more into the top of the business and the other gets worse if you do.

The two failures look identical from the owner's chair

Both feel like this: we are busy, the money is not what it should be, and something needs to change. From inside a business those two sentences are the same sentence, and the instinct in both cases is the same — go and get more work. That instinct is correct in one of the two cases and actively harmful in the other, which is why it is worth half a day to find out which one you are in.

A sales problem means: the business can deliver more than it is being asked to deliver. Capacity is sitting there. The constraint is at the front, in how work arrives or how it is converted.

A delivery problem means: the business cannot get out what it has already sold. The constraint is somewhere behind the sale, and every additional job you win makes the queue longer, the lead time worse and the customer experience poorer for everybody already in it.

The test, which takes an afternoon

Take the last twenty jobs. Not a sample, the last twenty, and no cherry-picking. For each one write down four dates: when the enquiry arrived, when it was quoted, when it was accepted, and when it was finished. If you cannot find those dates, that is itself an answer and we will come back to it.

Now measure two gaps.

• Enquiry to quote. How long did it take to get a price in front of somebody who asked for one?
• Acceptance to finished. How long from yes to done?

If the first gap is long and variable — three days, then eleven, then two — you have a front-end problem, and it is very unlikely to be a shortage of demand. A business that takes eleven days to quote is losing work it already won the right to compete for. That is a sales problem, and it is one of the cheapest in this trade to fix, because nothing needs to be bought.

If the first gap is short and the second is long and getting longer, you have a delivery problem. Spending on marketing here is spending money to make the queue worse, and it is the single most common expensive mistake we see in businesses of fifteen to sixty people.

The third case, which is the one people get wrong

Sometimes both gaps are fine and the money is still not there. That is neither of these problems: it is a margin problem, and it is usually that some part of the work is subsidising another part. Busy, fast, well-liked and unprofitable is a real and common combination, and no amount of selling or scheduling fixes it — the price or the cost has to move.

The way to tell it apart is to ask a different question of the same twenty jobs: for each one, did it make money? If nobody in the business can answer that job by job, that is the finding, and it is a bigger one than either of the two you started with.

What each one actually points at

A front-end problem is almost never about the sales pitch. In small businesses it is nearly always about what happens to an enquiry between arriving and reaching somebody who can price it: who sees it first, what they do with it, and whether it waits for one person who is also doing the work. The fix is usually a named owner and a rule about time, not a system and not a salesperson.

A delivery problem is almost never about people working harder. It is about the space between the steps — waiting for a part, an answer or a decision, or doing something twice because the first version was built from the wrong information. Those do not appear on anybody's timesheet, which is exactly why they are usually the largest single cost in the business.

Why owners choose wrong

Because a sales problem is a more comfortable thing to have. It is external, it is nobody's fault inside the building, and the remedy is to do more of something everybody already believes in. A delivery problem is a statement about how the place is run, and the person who runs it is usually the one deciding which problem it is.

That is not a criticism of owners; it is the reason an outsider has any value at all. We have no stake in which answer it turns out to be, and the twenty jobs are not an opinion.

If you do only one thing

Write the four dates down for the next twenty jobs as they happen, starting this week. Nothing else. In two months you will be able to answer this question yourself, permanently, and you will have built the beginning of the only operational measure most small businesses ever need.