#AskPS
Piyush Soni .

Most of the companies believe:

BUSINESS GROWTH = SALES ACHIEVED

Is this how every business growth is quantified?🤔

Is an increase in the number of sales, the sole reason for business growth?

Originally Posted Here
33 Comments

Rajesh Garg

Growth can be considered in various terms! Scaling your business! Increasing revenue, reducing costs etc. Only saying sales would be not fair!

Naresh Shetti

I wud say partially yes but not just the numbers but many other factors.

Piyush Soni

What other factors you believe decides the growth in your perspective?

Naresh Shetti

I believe that business is not just a money making entity, but rather has the potential to bring about a change in the society as well.

Growth according to me is participating in the development of some section of society, ability to create a trust in the minds of not just customers but also the audience.

For eg i would say oyo claims of having great sales number, but when the actual reality is checked they havent done much for the hospitality industry. Where as fab hotels brings about that trust factor in the customers, and also creates a trusted opportunity for the vendors.
As per me oyo is growing in one direction only while fab is spreading its roots to form solid grip
(examples are given based on understanding only not based on numbers. )

Geet Kiran Aneja

As an entrepreneur/founder your sole job is to take care of sales. Rest can be managed by your team. Any time spent on anything else for a founder is usually a waste

Piyush Soni

Ok thats correct! No doubt about that! The only question I want to ask is should sales be the only factor that should be considered while defining growth?

Geet Kiran Aneja

yes only sales. If people like buying your products, that's all the validation you need.

Rahul Rajvanshi

Geet Kiran Aneja the true sign of people liking your product is retention, sales comes second
For me
Retention and Brand Awareness (inbound traction) are also a very important pillar of growth alongside sales

Shivam Malhotra

Rahul Rajvanshi you need to sell first in order to bring them back & retain them.Retention is a huge thing for digital products but you monetize it as well right? Tab paying users kitne retain hue should be a metric.

Rahul Rajvanshi

Shivam Malhotra yes but only sales and no retention is equally harmful as well. My point is growth is always holistic
For short term one of the pillars can sustain the building but as you grow and build your org (which is growth in real terms) you will need to think of it from an holistic angel. So sales can't be just one of the metrics for the same
I hope you get my point

Shivam Malhotra

Rahul Rajvanshi sales are never the only metric for me🙂the KPI's I focus on are revenue & active users - this is the only thing any founder should track.This is something which was backed at YC Startup School as well,was watching a video where one ofthe partners said the same thing.

and ofcourse you want repeat sales.Growth in terms of sales happen when you're able to acquire new clients and extract more business from existing/previous clients.They both need to go hand in hand,acquiring only new clients cant be called growth,I'll call it sustaining.

you can change the term client to customers if you're in B2C space.I'm from B2B space so for me sales means clients😛

Rahul Rajvanshi

Shivam Malhotra true you ate saying the exact same I am saying. My point being revenue is not only sales oriented.
The logistics of dealing with retention via customer success
And inbound traction via brand awareness and marketing efforts
Increasing the number of mqls for sales teams
Ensuring increase in word of mouth and customer loyalty is totally different then only sales tough all of them have an end result as revenue
Every effort made into growth should be measured in terms of ROI and KPI to focus should be revenue
True that

Shivam Malhotra

Rahul Rajvanshi yes yes there are multiple factors which adds up to the revenue.the brand you build should make it easier for you to sell your product in the future compared to the effort you were putting in during initial years to achieve those revenue numbers,thats something which increases revenue (KPI achieved) and shows growth (comparatively less effort) in simple terms.

Rahul Rajvanshi

Shivam Malhotra 100% i really like your comments and insights. You are one of the few members here you share a proper, true version of everything with intellect and logic rather than anything else. Keep them coming

Faisal Zia Anwer

Yes. ONLY sales. Why do you think there are so many 'online courses' out there on 'How to do FB ads' or 'How to make your Instagram grow'

Sales first.

Vishal Rewari

Yes, that means whatever we are doing market is validating positively.

Rushi Ahuja

Not sufficient, but necessary

Mohit Arora

Yes. Sales is the blood flow of any business

Piyush Soni

Yes but is it the only factor?

Mohit Arora

it's the main. Success business means sales

Amit Gollen

If the business maintains a positive cash flow then it is growing.

Positive cash flows is supported by high profits.

High profits can occur in two ways:
1. You sell elite products at very high price so that a few sales can cover the expenses.

2. You sell normal products at reasonable price. In this case you will need to sell to millions if not thousands depending on the level you are at.

So I would say... quantity of sales are not a true indicator of growth. As you see in above two cases, positive cash flow is possible with a very few sales too.

For me business is growing when there is more control, higher autonomy, and a positive cash flow to support the system.

Shaju Nair

Revenue growth is the real growth. Everything else is just timepass.

Rahul Rajvanshi

I am sales guy and that's what I have done throughout the 3 years of my time in the startup ecosystem
However I am also a founder and I don't believe that sales is the only sign/metric/pillar of growth.
Following is not in any proper order
1. Retention
Sales is not the sign that people love your product. Retention (for subscription products) and repeat customers are the true sign that people love your product.

2. Brand awareness / Inbound traction
It's a very big factor of growth because now people know you. Your referral program is finally working, word of mouth is spreading. Your product is being discussed about in relevant forums.

3. Margins
Improving margins is another important factor like Rajesh Garg mentioned

There's lot more we can talk on but you get the idea

Shaju Nair

Retention will give you revenue, isnt it? Brand awareness means you have more buyers, else what is the point? Margin is a result of your sales efforts and cost control.

Rahul Rajvanshi

I don't buy cadbury because of their sales effort
I buy it because I know it's a brand. I buy it again and again because that's what all my friends recommend me
Retention, inbound traction all have end result as increase in revenue but you can't treat all of these as a sales function. Because logistics of all of it is very different

Shaju Nair

You know cadbury because you saw the ad on TV, then you went to the grocery store, you found the chocolate in the cooler. This is called Marketing and Sales. Because you buy the brand, cadbury generate revenue. But when you went to the store, if dairy milk is not there and Kitkat is there, you end up buying a competitor product, the value of the brand awareness is zilch. Sales failed here in product distribution.

Rahul Rajvanshi

Growth is always Holistic
Anyone who enforces otherwise knows nothing

Shivam Malhotra

Depends on the business but revenue & active users should be the only KPI for any founder to focus on.

Aashish Ramamurthy

If the retention rate of your customers is 10%MOM increase, I say that's a business growth because they are doing few things perfectly right.

Rahul Rajvanshi

+1 even 10% is not that good tough if you have a bit high ticket product

Aashish Ramamurthy

Yeah. I said mostly in common considering average product price.

Krishna Arora

Yes it pays the bills.

Sathish CP

Growth is different for each company, just like how success is different for each individual.

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