Quick Tips For Growing Your Small Business

Most small businesses start with the grand ambition of quickly becoming a medium, then a big business. Here are some quick tips for setting your business up for growth.

1. Increase Your Customer Numbers

Customers are those people who buy from you at least once. Your job is to find more customers who will buy from you. There are a number of ways to do this, however, if you want to do it fast, you need to identify who your customers are, where they congregate in great numbers, and direct your sales activities towards those ‘places’ where your prospective clients gather.

2. Develop a Marketing Plan

Undertake market research to determine the context of the market you are in and use this, and primary information gathered from your clients, to help you develop an appropriate marketing plan for your business, products and services. A well thought out plan is much likely to be more cohesive and more successful, while a hit and miss approach is likely to be more miss and less hit.

3. Sell More Stuff

Use your existing customer database to sell more stuff. If your customer has already bought a product from you, try to sell your other products and services to them. It is not only easier, it is cheaper too. Research has shown that it can be up to five times cheaper than the cost of finding new customers. You could even ask your customers for referrals.

4. Add More Value

Research has also shown that customers buy based on perceived value and not on price. So look at ways to increase the value of your products or services. A quick way to find out what kind of value you should be offering is to ask your customers. Calling them or asking them to complete a survey about your products and services will help you to find out what your customers are wanting, demanding or wishing for. This information can help you to add value, improve or develop products to keep your customers happy and buying more.

5. Build More Capacity

Improve your customer service processes by making them cheaper, faster, easier, etc. Train your staff to be more competent, learn new skills and improve the customer experience. The more work you put the development of your business, the better able it will be to meet ever-changing demands of your customers and increase it’s ability to adapt to the prevailing business environment.

6. Extend Your Sales Opportunities

Look for ways to generate sales opportunities. This could be through co-operative marketing, new lead generation ideas, the addition of new products and services or greater networking, just to mention a few ideas.

This is just a few ideas to put your small business on the path to growth. With a bit of research, a bit of planning and a lot of focussed activity your small business can become a medium business in no time at all.

Small Business – Growth Stage 3b – Meeting Demand

Yes, crazy demand is a problem that you want to have. But when you are in the trenches, there is nothing fun about it (Well it is for me, but I’m a freak). Things are going crazy, you are going crazy – You are simply too busy to think, never mind think strategically.

In this phase, it will seem like everything has gone to crap – Probably because it has.

I would love to be able to write an article that shows you how to meet demand across any industry, but the truth is, there are so many case specific scenarios that this post would be better fit for a hardcover book, than a few page blog post.

What I am going to do for you however, is tell you about a few things that you really need to watch for during this phase. These are all from my own experience and are serious issues regardless if you sell yourself as a service, manufacture a product, create information products, or are a marketer and drop-shipper.

Step up or Step Aside – Leadership needs to come in

This is a problem for lots of people, and there are two main reasons. First, to most, the business is their baby and represents their own blood, sweat, and tears. You have been in from the beginning and the success is directly the result of your effort, and your decisions. The draw of having your hands in the cookie jar and being in charge of everything is just irresistible. It’s hard to step out of that role.

Second, some people are just not good leaders. The skill set that is required to develop something is not the same as the skill set required to lead the troops and keep your head up in the strategic clouds. I believe you can learn to be a good leader, but to be a great leader, it takes both practice and an innate ability.

Whichever the case, someone is going to have to step up and away from the day to day and start to worry about the big picture. The simple truth is that there are just not enough hours in a day to do everything that needs to be done. If you try, you will fail and probably burn out in the process. To make matters worse, it is nearly impossible to wear both the strategic hat and the “doer” hat at the same time. I’ve tried several times and failed miserably in every case.

If you choose to become the “big picture guy” yourself…

Find some bright folks you trust, and put them in charge of that area you used to head up. Early on, their ability to communicate and make you feel comfortable are going to be more important than the actual skills they posses to do the job. Once you are OK with the concept of not being hands-on anymore, you can worry about finding the exact right person for the job.

If you choose to bring in a “big picture guy”…

Frankly, this is where people like me come in. You will want to either hire, or most likely partner with a person who can come in and help you to the next level. The reason I recommend partner is, because at this point, you REALLY want someone worth their salt, and they are not cheap. Players in this range are used to the six-figure income, and are not likely to join you for less than that. Bringing them on as a partner allows you to either pay substantially less as a base salary with a percentage of sales as the remainder, or even bypass salary all together for a flat percentage of sales (how I usually do it). The percentage they demand will be higher, but on the upside, if you don’t make money, they don’t make money.

The key to bringing on a new player at the stage is trust. Start small and shift more and more power over to them as you feel more comfortable. Do not micromanage or tell them how to do their job. Remember you brought them on because your DON’T know how to do it. Let them do their thing and come back to you. They probably won’t do it the same way as you, but their way will probably be better.

I haven’t really pitched myself in about 1000 pages of articles, so I might as well now. Seriously, give me a call. I might be able to help.

Strategy and systems will save your ass, not manpower.

Simply throwing more bodies at a problem is rarely the answer. It might be PART of the answer, but without organized systems in place, the utility of each new player added to the team will decrease the productivity of ALL players by an order or magnitude. Roles will overlap, things will get lost in translation, morale will plummet, and productivity will be a fraction of it’s true potential.

Here’s how you do it.

Have your strategy person, either you or me (hint hint) start evaluating your business model. Are there any things that could be done that will simultaneously increase your profit margin, reduce costs, and reduce the time to sale. If it’s all 3, then that is your low hanging fruit. As that subsides, start to look at the things that might satisfy 1 or 2 of the criteria and start attacking them.

I’m not saying that bring in more people is not a good idea. I usually is. What I AM saying is that blindly throwing more bodies into the works usually makes things worse.

An example from my questionable past

A few years back I partnered with a rockstar investment real estate broker in exactly this stage of the game. Sales were skyrocketing, demand was through the roof, but there was simply not enough hours in a day for him to get it done.

He was a super intelligent guy and a true freak-of-nature salesman, but he was definitely lacking in both the big picture view and leadership role.

After meeting him a few times and tossing some ideas around he agreed to bring me on as a partner. Because throwing me a salary would be too much for him, we agreed that I come on as a limited partner at first with 1/3 of the future net profits going to me. Once we doubled his sales, we would become full 50/50 partners. It was a pretty big leap of faith for him, and I appreciate his trust, but ultimately it wasn’t too much skin off his back since ultimately if I didn’t produce results, I didn’t get paid either.

His niche was selling properties (usually condos) in the $100-150k ballpark to both investors and parents/students of UF. The market was hot enough at the time that if you bought a condo your freshman year and lived in it with a few roommates, the rent and appreciation on the unit would pay your entire tuition for 4 years and still leave you with about $40k left over. It was an easy sell, and he sold LOTS.

The problem was that all real estate sales take about the same amount of time for the broker, regardless if it is a $100k sale or $1M sale. (In truth, usually the bigger ones are easier because buyers at the level are pretty familiar with the game. More legal, but less drama)

I realized right away that this was not a sustainable growth model.

After a bit or research and planning, I created a plan to take on no clients unless the property was over $500,000 and we had a very good chance of getting both sides of the commission. As you can imagine, for a top producer this is a HUGE change. He was ingrained to take any business, anyway he could.

My logic was that because he was so fantastic at converting calls to qualified leads, we set up a referral program to front our tier 2 prospects to other agents in exchange for 25% of the final commission. That allowed us to keep in place turnkey marketing programs targeted to smaller profit centers, and still earn a healthy side income on very little work.

With this strategy in place, we were allowed once again to focus on a new marketing plan to help roll in larger, more profitable clients.

We still continued to get calls every day for smaller clients, and many times, we had the perfect buyer ready to roll within the hour on the sale, but we had agreed to only focus on larger clients, REGARDLESS of how quick or easy we knew the sale would be. For weeks he would look over at me with puppy dog eyes begging to take on this easy client, and I would point to our business strategy on the wall. Eventually he got the idea and stopped whimpering.

As things began to take off, I began to further refine our strategy to squeeze every penny out of our time. We hired one assistant to take first tier phone calls and to set appointments freeing up his time. We also hired another general assistant that would do much of my front end marketing work and to keep track of all the new developments and marketing metrics. We finally brought in another new realtor who had just graduated with a degree in finance to manage many of the showings and to add another level of granularity to incoming prospects before they made it to either Tom or I.

The result:

Year 1 sales: $200k

Year 2 sales: $400k

Year 3 sales: $1.2 Million

It’s important to note that we didn’t bring on any help until year 3. As you can see we were able to DOUBLE sales with no additional help other than me. That was refocusing strategy and tweaking systems. But we did need to bring in help to take it to the next level. As I said, there is a time and a place to throw in more bodies, but it has to be to support the plan, and just not for the sake of more manpower.

Stay tuned. Next Article is going to be about declawing your competition.

Stay cool

JJ

Business Growth – Are You Choosing the Best Way?

One of the best and least expensive approaches to business growth is through your current customer base. It is far easier to sell more to customers who are already buying from you. You don’t have to spend a huge amount on marketing because the relationship is already established.

What you do need to do is to find creative ways to sell them more of what they are already purchasing from you or introduce them to other products or services in your range.

Study your existing customers’ profiles to gain insight into the type of customers you attract and use that information to find more of the same. Look for potentials whose needs are similar and who tend to make purchases in the same way. You should see quick and significant growth to your business with both of the above approaches.

Business growth could come through investigating new markets for your existing products or services. For example, you may manufacture a piece of technology that is sought after by the transport industry.

With research, you may find that it would be equally useful for the aerospace industry, albeit for a slightly different purpose.

Developing new products or services could be the key to business growth. They could be in addition to what you already offer or to replace existing ones that are becoming uncompetitive or obsolete. You should offer these to your existing customers first. In this way you can test and fine-tune your approach before going large-scale.

If your business is small, business growth through diversification is not really for you. It is a high risk approach. It should only be considered if:

o You cannot meet your goals for business growth through the other approaches

o You have the capital to invest and the resources to carry the work through