Have you had this experience: A “new” product comes along and you decide to add it to your current offering of home improvement items. The product is well accepted by customers, and your people make sales. Then you notice that your profits are remaining stagnant or are going down.

Yes, it's possible. And if it happens, it's probably because you forgot one of the necessary ingredients in the formula: more salespeople.

When you introduce a new product but don't increase your sales-force, you're going to lose money or, at best, just trade dollars.

TWO PLACES AT ONCE Let's imagine that you have a salesman who is currently running leads, selling windows and siding, and is producing an annual volume of $800,000. When you introduce a new product, how is he going to have time to sell it?

If he runs leads for the new product, he will not be running the window and siding leads. You'll be trading dollars, and the trade may not be an even one.

If the new product sells at a lower price — what I call an “entry-level product” — it is quite possible that closing ratios will improve and the number of sales will go up. Don't be surprised, however, if your gross revenue goes down because you don't have enough people.

You need to find, hire, and train quality salespeople. That's where many small companies run into trouble, and that brings me back to the new-product dilemma.

LIKE A NEW BUSINESS Taking on a new product is not that different from starting a new business. You have to market, sell, install, and service that product.

It's true that you have an existing infrastructure to work with, but if you don't have a plan that will maintain the level of your existing product sales while you generate new sales with the new products, you're just trading dollars.

The key to making your business grow profitably when you add a new product is to add everything else that's needed: salespeople, qualified installers, and a marketing plan.

—Chuck Anton is a sales and marketing consultant who specializes in the home improvement industry. Reach him at www.chuckanton.com.