HOW TO GROW YOUR BUSINESS
Your business is flourishing, but how can you elevate it further? Top-tier businesses continually seek improvements, from enhancing product quality to streamlining processes. Here’s your guide to advancing your business to new heights.
SIGN’S IT’S TIME TO GROW YOUR BUSINESS
Constantly seeking business improvement is key, but be wary of expanding too hastily. Consider the case of American Apparel: within six years of starting, it had almost 300 stores, only to later face substantial debt, bankruptcy, and eventually transition to an online-only model. This underscores the importance of timing in business growth. Before dedicating excessive time, energy, and resources, ensure it’s the right moment for expansion. Here’s what to look for.
YOUR INDUSTRY IS GROWING
When your market or industry shows signs of expansion, it could be the opportune moment to scale your business accordingly. Fundera, a financial services firm, indicates that currently, industries like real estate, hospitality, and consumer retail are rapidly growing in the United States. Additionally, Jim Patterson, Managing Editor of The Kiplinger Letter, predicts significant growth in sectors such as cannabis, online grocery delivery, and healthcare over the coming five years.
CASH FLOW IS STEADY
Ensure financial readiness for expansion. Prior to significant actions, steady income over several years and a continual influx of new clients are crucial. Paco de Leon from The Hell Yeah Group, a financial consultancy for creative entrepreneurs, emphasizes, “A growing pool of prospective customers signifies existing demand, while consistent profits indicate sustainable growth without getting ahead of oneself.”
YOUR CUSTOMERS WANT MORE
When your business consistently exceeds its capacity to meet demand, it’s likely a sign to expand. However, a temporary surge in sales doesn’t always mean sustained high demand, so it’s important to verify ongoing excess demand. Are there other products your customers are interested in? Engage with your customers through interviews and surveys, gathering their opinions on satisfaction, interest in new offerings, and general feedback about your business. Analyze the feedback for recurring themes. If there’s a clear desire for more of your products, quicker delivery, or extra services, it’s a strong indicator of growth.
HAVE YOU DECIDED IT’S TIME TO TAKE THE NEXT STEP? HERE ARE A FEW STRATEGIES YOU CAN TRY
GET NEW CUSTOMERS FOR YOUR BUSINESS
One of the most straightforward strategies for business growth is attracting more customers. There are several effective methods to do this, whether your target audience is individual consumers or other businesses.
GET TO KNOW YOUR EXISTING CUSTOMERS BETTER
“To understand what people really want, you have to find out what their real challenges are,” said Ramit Sethi, the author of the New York Times best-seller, “I Will Teach You to Be Rich” and founder of Growth Lab which assists entrepreneurs in developing and expanding online businesses. Assess why your current customers chose your product. This insight can highlight your strengths and identify ineffective marketing tactics. Sethi conducts extensive interviews with his customers, who are business owners themselves, to understand their difficulties and recommends the same approach. He suggests asking:
- Describe your typical day. What aspects do you enjoy the most, and which are the most challenging?
- Have you purchased a similar product in the past?
- If you could envision an ideal outcome, what would it look like?
For businesses serving other businesses (B2B), inquire about their goals related to business and revenue. These interviews can be conducted over the phone or via email. Engage with a diverse range of customers, including both regulars and occasional users. This interviewing process can be invaluable in refining your marketing strategies, and helping you identify what is and isn’t effective.
PINPOINT WHAT MAKES YOU DIFFERENT
Numerous entrepreneurs initially thrive by emulating the business model of their competitors. To scale your business, though, differentiating it and establishing a distinct brand identity is essential. Customer interviews can also be useful in this process.
Try it: Develop a persona for your ideal customer. Craft a narrative describing who they are both before and after they use your product or service. This exercise might have been part of your initial launch strategy, but it’s crucial to revisit and refine this customer profile as your business grows.
GET OTHER PEOPLE TO HELP
Affiliate marketing involves partnering with a third party to promote your product or service, in exchange for a percentage of the profits. This strategy can be particularly effective for B2B companies, allowing them to leverage their existing customer base to introduce their products to a wider audience. Collaborating with similar businesses, bloggers, or influencers can significantly extend your market reach (just be cautious to avoid direct competitors). While you can personally seek out potential affiliates, having a system to monitor link clicks and purchases is crucial. Platforms such as ClickBank and Rakuten are useful for initiating your affiliate marketing efforts.
BUILD A BIGGER ONLINE PRESENCE
Even for non-online businesses, enhancing your digital brand presence is vital to increase product visibility, particularly for direct-to-consumer sales. Consider these tactics:
- Regularly publish content – Maintaining an active presence through a blog, newsletter, or social media platforms like Twitter keeps your audience engaged with your brand. Tools like Hootsuite and IFTTT can assist in scheduling your posts and shares.
- Maintain brand consistency – Ensure that the content you share across various online channels aligns with your brand’s ethos. For instance, if your brand values simplicity and minimalism, avoid posting content that contradicts these principles, such as extravagant shopping deals.
- Run a promotion – Create excitement about your brand with contests or giveaways. Take inspiration from Lonely Planet, which uses Instagram for users to tag travel photos, potentially featuring them on their page. This strategy not only broadens their audience but also encourages user-generated content, promoting the brand without incurring additional costs.
SPLIT TEST MARKETING STRATEGIES
The marketing landscape offers numerous rapid tactics for experimentation, such as A/B testing or split testing. This technique allows you to evaluate different strategies to identify the most effective ones. For instance, you might test the effectiveness of a green “buy now” button against a yellow one on your website. Other potential split tests include:
- Email subject lines: Determining which leads to a higher open rate.
- Web page titles: Identifying which title attracts more clicks.
- Social media posting schedules: Figuring out which day of the week generates greater engagement.
Many of the marketing tools you’re likely already using, such as HubSpot, ConvertKit, and Google Ads, provide functionalities for split testing. Experimenting with these options can reveal the tactics that best resonate with your audience.
DO BUSINESS FASTER
Your business’s operating speed significantly impacts your financial success. Patrick Bet-David, ex-financial advisor and present CEO of PHP Agency, Inc., an insurance firm, says, “The most important thing for a startup entrepreneur is speed. The faster you move, the sooner you can grow your business.” There are four operating speeds to think about:
The operational speed of your business refers to the pace at which its daily activities are completed. “The more support you have, the stronger your functioning speed,” states Mr. Bet-David. Generally, a larger team correlates with increased efficiency.
Example: You’re running an Etsy shop selling physical products and managing all aspects alone – from creation, social media, shipping, to customer interaction – your operational speed is limited. By employing an assistant to handle shipping and social media, your business operations can accelerate significantly.
However, enhancing operational speed doesn’t always require additional staff. Something as simple as upgrading to a faster internet service when dealing with slow Wi-Fi can markedly improve your operational efficiency.
Processing speed in your business refers to the time taken from product order to delivery to the customer. “In real estate, this would be the time it takes to go from ‘I want to buy a home’ to actually closing on the home,” explains Mr. Bet-David.
Consider a financial consulting firm as an example. Traditionally, setting up consultation calls with a new client involves several days of back-and-forth emails. By implementing an online scheduling tool like Calendy or Square, you can streamline this process, allowing clients to book sessions in one easy step.
To enhance processing speed, prioritize efficiency. List every step in your sales process and identify any that can be streamlined or combined. Utilize automation tools like Zapier, Hootsuite, and Hubspot for routine tasks. For instance, if handling customer returns consumes too much time, a tool like Returnly can automate and quicken the process. Similarly, simplifying your invoicing system by removing unnecessary steps can also expedite operations.
Timing speed in business is about capitalizing on the right moments for growth, often requiring the ability to recognize opportunities and sometimes step back for greater leaps forward. This is a harder one to plan for, Mr. Bet-David said. “Intuitive people are good at it.”
An illustrative case is Mitsubishi’s strategy in 2005. As gas prices soared, they offered new customers a year of free gas through a prepaid debit card. This relatively low-cost incentive led to a 7.2% increase in sales and enhanced brand perception, as reported by Heinz Marketing.
To improve your timing speed, focus on identifying opportunities and strategic positioning. Pay attention to current customer challenges and devise solutions. For instance, when planning a marketing campaign for your product, consider the most opportune timing for launch, aligning with market trends or customer needs. This approach helps in making the most of opportunities as they arise.
Expansion speed is about recognizing your business’s next strategic step and the optimal timing for it. However, Mr. Bet-David cautions against overreaching. “A company that’s trying to grow too fast is worse than a company growing too slow.” It’s not merely about immediate growth, but rather discerning the right moment for expansion.
Example: Suppose you run a successful furniture rental business that specializes in real estate staging. You observe a frequent demand for children’s furniture, an area where your inventory is limited. After conducting customer interviews and analyzing their needs, you choose to expand your offerings by investing in children’s furniture for rental. This expansion is planned for the following year, aligning with an anticipated 8 percent increase in business profits.
Enhancing expansion speed requires strategic foresight. “Most entrepreneurs have no idea who their ideal customer is,” Mr. Bet-David said. “You have to figure out who’s in your niche, then figure out where your market is.” This involves knowing the geographic and digital spaces your customers frequent and their search habits. Utilize tools like Google Keywords, Google Trends, Quantcast, and Market Samurai for insights. Additionally, engaging with your current customers through interviews and surveys to discover their unmet needs can be invaluable.
SELL MORE THINGS
When your existing product or service is in high demand, introducing a new offering could be a strategic move. “You can add more products, higher-priced products, or upgrades and add-ons,” Mr. Sethi said. “You could also consider a monthly subscription model, similar to what Netflix or Dollar Shave Club does.” If your portfolio already includes multiple products, encouraging current customers to increase their purchases is another viable strategy.
RESEARCH YOUR IDEA
Launching a new product fundamentally begins with thorough research. “When you discover that nobody actually wants the product you spent thousands of dollars and months creating, it’s a huge blow,” said Mr. Sethi. To avoid this, delve into existing customer data related to your product. For example, if you’re expanding a successful money-saving app to include investing features, explore online investment forums and review investment book feedback. Assess the needs and problems customers express. Additional research areas might include:
- Understanding where your customers reside, their online activities, and search behaviors. Tools like Google Keywords, Google Trends, Quantcast, and Market Samurai can assist in this research.
- Analyzing competitors with similar offerings. Examine their growth trajectory and what you can learn from their customer reviews.
- Conducting interviews and surveys with your current customers to discover their unmet needs.
Ms. de Leon adds, “Engaging in customer conversations reveals potential related services or products your business could introduce. However, launching a complementary product or service will inevitably divide your focus.”
BUILD A (BASIC) PRODUCT
Before fully committing to your new product, begin with a simplified approach by creating a Minimum Viable Product (M.V.P.). This is a basic version of your product that satisfies the minimum criteria for release. It’s crucial to avoid overcomplicating the initial design, as this can make evaluation difficult and limit adaptability based on customer feedback.
Take, for instance, introducing a subscription option to your flower delivery service. While it might be appealing to offer various bouquet choices, delivery schedules, and pricing, it’s better to start more straightforwardly. Consider offering a single option like a dozen roses for $39, delivered monthly on the 15th. If this basic offering is well-received, you can expand and refine it later.
To launch your M.V.P., first clarify the specific solution or benefit it provides. Then, develop its most fundamental features and establish a sales channel, which could be anything from your existing email list to a basic landing page accompanied by an advertising campaign.
UPSELL AND CROSS-SELL
Upselling involves persuading customers to purchase complementary add-ons, while cross-selling encourages them to buy completely different but potentially beneficial products. Many businesses implement these strategies at the checkout stage or through follow-up emails. The core objective remains the same: to motivate existing customers to make additional purchases.
When executing these strategies, consider the following:
- Transparency about costs and value: Customers, already spending, will want to know why they should invest more. Clearly communicate the additional expense and the specific benefits they’ll gain.
- Provide social proof: Showcase customer testimonials, either through videos or written statements. If you lack such testimonials, leverage data or statistics about your business, like inviting them to join the thousands who have already purchased additional services.
- Timing of the offer: Strategically choose when to propose an upsell. This could be after the customer achieves a milestone with their initial purchase, during seasonal changes, or on certain holidays. For instance, a personal stylist might introduce new services to past clients in the fall or spring to align with wardrobe updates.
HIRE A TEAM
“At some point, as your business grows, you just won’t have the time to be in the office, at the computer, doing the project management because you’ll be going on lots of site visits, meeting with current clients, and wooing potential clients,” said Ms. de Leon. When you reach a point where taking on more work becomes unmanageable, and it’s hindering your business’s growth, outsourcing becomes a viable option to accommodate the increasing growth and demand.
KNOW WHEN IT’S TIME TO OUTSOURCE
Determining the right moment to recruit a team can be guided by several key signs:
- You are declining opportunities due to limited capacity.
- Excessive overtime is becoming a norm.
- You’re passing up opportunities because you lack specific expertise.
- You can calculate the financial benefit of a new hire (for example, investing $30,000 annually on them could generate an additional $100,000 in business).
Ms. de Leon advises that if you already have a team, it’s logical to consider expansion when your existing team is operating at or close to its full capacity.
WRITE A JOB DESCRIPTION
To identify the role you need to fill, start by listing all the tasks performed in your business. Then, identify those tasks that are systematic and can be delegated to someone else. This will help you formulate a clear job description.
Ms. de Leon points out that hiring is most effective when structured operations are already established. “Recognizing that a business is essentially a well-honed process that people are willing to pay for is key to improving it,” she says. “Whether you’re offering a service, a product, or an application, what you’re really selling is your unique method of solving a particular problem.”
HIRE THE RIGHT PEOPLE
Assembling your team requires choosing individuals who are not only skilled but also align with your company’s character and culture, as advised by Ms. de Leon. “Skillset is important, but it’s equally crucial that team members resonate with the ethos of your company.”
Before finalizing new hires, conduct practical evaluations. For example, assign a detail-focused task to someone who claims to be detail-oriented, or test someone’s ability to handle stress with a deadline-driven task. Consider a probation period of 30 to 90 days to ensure mutual satisfaction.
Expand your search beyond traditional job boards by leveraging your network. “I’ve made some of my best hires through personal connections or community interactions,” shares Ms. de Leon. Resumes alone can be insufficient for gauging a candidate’s suitability.
In interviews, prioritize open-ended questions and allow ample opportunity for the candidates to express themselves. While general inquiries about past experiences and challenges are standard, tailor your questions to probe deeper into the three key areas: alignment with company culture, personal character, and professional competency.
LEARN SOME MANAGERIAL SKILLS
The primary aim of building a team is to increase profits by concentrating on your strengths while delegating other tasks. However, as Ms. de Leon points out, an often overlooked aspect is the shift in your role. “With growth and new hires, your responsibilities evolve. You’re now managing individuals or a team, navigating personalities, conflicts, and group dynamics.” It’s crucial to assess whether you’re suited for and interested in this managerial role. Exploring basic management courses on platforms like Coursera and Lynda can help determine your aptitude and enjoyment for this role.
Ms. de Leon also notes that staying small isn’t inherently negative. Rapid expansion can actually pose risks. The Startup Genome Project, a research organization, identified “premature scaling” as a leading cause of startup failures. While growth has its merits, sometimes the best strategy is to maintain your business as it is, allowing it to prosper in its current state. As Ms. de Leon remarks, “Pursuing growth for its own sake isn’t always advisable.”
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