One of the first things that business owners that start the Your Business Success Program tell us is that they want to ‘grow their business’. They have lots of ideas, they have tried many different marketing activities but at the same time they are totally confused about where to start.
The first step is to try and narrow things down and get some focus. Here are four key strategies to grow your revenue and profit:
1. Find more customers.
2. Sell more to your existing customers.
3. Increase your price.
4. Increase your margins.
In this article I will look at each strategy and give you a few examples and ideas that cost very little, are easy to do and add profit to your bottom line.
1. Find More Customers.
Start by conducting an audit on all the activities that you have tried over the last 1 to 2 years. Work out what is and isn’t working. Review all your marketing performance indicators e.g. number of leads, cost per lead, cost per sale, average sales price, number of sales per customer etc. Focus on the activities that work, dump the failures and start making changes to those that have potential to get them performing better. One client saved $2,000 per month by stopping an advertisement that just wasn’t working. As they say, what you can measure you can manage!
An Easy Win – Chase up existing leads. One of the most common questions we ask business owners, especially trades people, is do you follow up all the people you have given quotes. The most common answer is “NO”. I recently challenged the business owner of a fencing company who was complaining that he didn’t have enough work to ring up the last 15 people he had done quotes for. He picked up 7 jobs. Why? Simple, he was the only one that called. He now has too much work!
2. Sell More to Existing Customers.
This is often the easiest way to grow your business and it is often ignored by people. You have done the hard work and won them as a first time client. Now it is time to focus on building a long term relationship and sell more to them, more often. An easy way to start is just by just asking how you can help them. Phone them up. Make a time to visit their business. Talk to them the next time they visit your business. Email a simple survey using an online product like Surveymonkey.com.
Ask and You Shall Receive
An engineering company couldn’t get out of the ‘feast or famine’ cycle. They visited their top 10 customers and asked them some very basic questions.
• What do you like about the work that we do for you?
• Is there anything we can alter, change or improve?
• What are your plans for the coming year?
• How can we help?
The result was a new service called a Monthly Preventative Maintenance Audit. They charge for the audit, maintenance is planned throughout the year, work is now more consistent and the clients have less emergency breakdowns. So start talk to your clients, they might have the answers for you.
3. Increase your price.
This is a tough one and no one likes it. But imagine if you could increase your price by just 2% across the board. On a $500,000 turnover it means $10,000 straight to the bottom line. An accounting firm ranked all their clients on a range of criteria including profitability. They sold off the bottom 20%. They then bit the bullet and increased their fees by 10% for the remaining 80% of clients. The had worked out scripts on what to say, collected testimonials from happy clients to back up their quality of service and even offered a money back guarantee. In the end they only lost 3 clients and added $100,000 to their bottom line.
4. Increase your margins.
This is all about making your business more efficient and effective. Review all your costs and see which ones you can reduce. A simple idea is to ring up each of your main suppliers and ask for a better deal. Meet with your team and find out if things can be done faster, with less people, less materials or cheaper materials. Can you recycle, reduce stock levels or reduce your range of products? Review your team’s performance. Often additional training or mentoring from more experienced team members can reduce mistakes, save time and reduce waste.
Andrew Vincent was the creator and producer of the Channel 9 television series Your Business Success. Over 80 of the best episodes have been re-edited and supported by a set of easy to follow workbooks and FREE business coaching. Go to www.yourbusinesssuccess.com.au/db
