How do you grow a business?
If you look at most textbooks they will tell you that there are four classic ways to grow your business.
- Generate more marketing leads.
- Create an effective system to convert leads into sales.
- Maximise the value of each sale by getting your pricing right and using techniques to generate larger sales.
- Get a system in place to increase the frequency of sales – for example building customer relationships and loyalty programs.
You will be able to find lots of information about the four classic ways to grow your business from numerous sources so we are not going to dwell on them further. Instead, we are going to focus on three further methods, which we consider crucial to growing any business. These are:
- Thinking big
- The customer experience
- Thinking value
The first one is to think big. In everything you do as a business owner you should think big and not get side-tracked with trivia.
Examples could include:
- Instead of having just one business location you could set up new locations.
- What about approaching competitors and buying them out or merging with a competitor?
- How about franchising your business or business opportunity?
- If you have a unique service or product you could licence it for others to sell.
- What about building a sales ecosystem?
- You could develop add-ons to your core products or services.
Taking the last example, many business owners have discovered that their most profitable product or service is not their core product but something they have attached to it or something that has arisen from the core product. For example, you buy a white good, a fridge or a freezer, the sales person will then try to sell you an insurance product or an extended warranty. Pound for pound which has the greater profit?
Looking at your core service, can you create and promote an additional service?
Another example of thinking big is digitalisation. Could you transform your business by embracing technology? For example, Lego’s business model was dying. However, in recent years Lego increased revenue through movies, mobile games and mobile applications. All of this involves thinking big, thinking outside the box and thinking about how you are going to grow your business to the next level.
The second method to consider is customer experience. Having a quality service or product is great. However, is this enough?
Starbucks make a great coffee. However, Starbucks is popular and as a result, there are queues. The customer experience could be damaged so to make things easier Starbucks introduced their mobile order and pay app to get around the queues and thereby improve the customer experience.
Amazon are the kings at improving the customer experience – one click purchases, Prime, Alexa are just a few of the innovations they have introduced to improve the customer experience.
There is nothing more powerful than building a great customer experience. More than anything a great customer experience breeds loyalty and helps secure the growth of the business.
Finally, our third method is to think value. We have seen businesses with little or no turnover with valuations running into millions of pounds, but why is this?
Ultimately, they had something people value. Not a strong balance sheet, not a list of customers, it was potential – the promise of future riches. And what form does this promise take? It is not hard assets that you can see, but intangibles. The biggest intangible asset is IP or intellectual property. IP includes trademarks, copyrights, patents, trade secrets and trademarks software and apps. This is not just for IT companies. It also includes unique practices a business might have to make it more efficient than its competition, a book and articles written by the business owner or an innovative product.
Another intangible is the brand. Building a strong brand means that your company becomes known for something.
BMW & Rolex are known for high quality. Apple is known worldwide for its innovative products and minimalistic, aesthetic appeal. The trust and reputation of these companies generates growth.
Systems is another intangible asset. Implementing a system so that every employee within your organisation works on the same basis greatly improves quality and efficiency. A good example of a systems based business is McDonalds where every burger is cooked in exactly the same way to the same specification. And there are many more intangible assets that you can build within your business which could increase the attractiveness of your business to a potential purchaser.
We believe these are the seven ways to build a business. The last three are the ones which we believe really make a difference. The idea, the quality of the product or service and the effort you put in are all important. The classic four ways to increase revenue will help. But thinking big, offering excellent customer experience and building real value in the business will help grow a small business into a great business.
If you want help growing your business then please call us or contact us here.