Many small companies get very good at solving problems. As a result, they are great at “how”. It is easy to get very caught up in the how because it moves toward a solution and feels really good. Often though, businesses will start down the “how” path without having truly identified the who, what, when, where and particularly the why first. There is a reason in business anyway, that “how” comes at the end of who, what, when, where, why and how. So this is the oversimplified starting point when trying to consider how to grow your business.
Fundamentally, there are only three ways to grow your business. All growth strategies come back to one of these basic building blocks. This makes planning for your growth straight-forward enough, but, it does not make it easy. Having some plan, even a bad plan, is better than no plan at all. Here are the three ways to grow your business and some considerations along the way.
The three ways to grow your business.
Raise your prices. Provided you have no drop off of customers or slow down of sales activity, you can grow your business by raising your prices. Of course you have market conditions (i.e. competition) that may negate this option or make it unreasonable, in which case you will need to visit the second and third ways.
Sell more stuff to the people you already know. Your Customers can always be asked to buy more volume. You can work harder to sell everything you can to your Customers. You can also expand your product offer to have more things to sell. In the end, this strategy is expanding annual revenue produced by the existing Customers. It is this strategy that typically drives new product development initiatives. Sales costs are low. Marketing costs are low. Product development costs generally are high.
Sell your existing stuff to a broader audience. The folks you don’t know yet could buy your stuff, too. You could do more trade shows? You could do more e-mailings? You could hire more sales people and they could sell your stuff to the people they know? Sales costs will be high. Marketing costs are high. Product development costs are low.
To create a plan for success, look at these three areas individually and develop a strategy for each one that you want to pursue. Always look at how you can raise your prices. Always consider how you can sell more things to the same Customers. Always consider how to develop new relationships.
In doing the planning, be sure to include target expectations, with time and resource definitions and a calendar. Some things will work. Some will not. If you don’t understand what game you are playing, you can’t keep score. Only through score keeping can you determine what is performing better and what is not.
If your business is small, identify an amount of money you wish to come out of pocket to invest. Be aware that some things, like sales investments are mostly your time since the payments will come only on the successful sales. Others like product development may only be your personal time. While still others, like trade shows are your money and your time. If you put all your time in one area, you won’t have the time you need to achieve one of your other objectives. The same is true with your money. Spend them both wisely.
The art of business is determining what portion of your limited resources (time or money) is the appropriate portion to devote to your growth. Once you determine what amount of resources it will be overall, then you portion it again toward each of the above mentioned three areas. Then, hold yourself accountable with ongoing monitoring via the scorekeeping.
Once you know what works better and what does not work, it gets even more fun – was it what you did, or was it how you did it? Isn’t the art of business great!!!