Growing Your Business
Growing a Business
Growing your business is like starting your business in that it requires just as much research. Practical measures to achieve growth are as simple as doing more business with existing customers. The Small Business Development Center has broken down growing your business into four viable options. This explains each option and helps you decide which approach best fits your business. The four options are:
- Ride a wave of increasing demand.
- Persuade the customer to place more of his business with you.
- Add additional products or service that complements your offering.
- Increase demand.
This list is not comprehensive and you may need to follow a different approach to achieve the same outcome.
What’s in it for you?
Growing a business through your customer network is probably the simplest approach. Sometime this approach is so obvious that it is often overlooked. There are many advantages in choosing to grow your business through your existing client base. It is low risk as it requires little business investment on your part and builds on your business strength and expertise. It can produce quick returns on your investment. Existing clientele already trust the way you do business and you will have the least resistance in price sensitive markets. This can be more profitable in the long term.
Where Do I Begin?
When we speak of existing customers, we not only mean the customer you are currently doing business with but also customers just like them. Think in terms of processing sales with the personnel you have in place. For example, you advertise in a local newspaper once a month and of the new leads generated you close an average of 30%. You may choose to advertise more frequently to generate more leads and close more sales. Some people may not have bought from you before but the sale can be processed with the same resources you have in place.
Remember, to pursue growth requires research, research, research. The American Marketing Association has a great set of tools to assist you as you do this research: http://www.marketingpower.com. Closely study your existing client base and determine what has made them your customers. Explore that client base. Your best referrals will come from this list. As you exhaust this growth and your goals increase, you may need to explore other areas for growth. It pays to know your key customers and how profitable these existing customers are. Take a good look at the 80-20 rule (80% of your revenues will be generated by 20% of your customers). The investment in time will pay handsomely in the future. In this research phase you may find that groups of customers fall into categories that need to be handled differently. Try to arrange these customers into groups based on product, profit, and time required to service. You may also find that some customers do not generate the profit you expected because of the problems they bring. You need to have the understanding to let these customers go somewhere else or raise the price to reflect the level of service required.
What should I do NOW?
The most important time spent is in developing a “key” customer list. These are the clients on whom you will focus most of your effort. Remember: take a look at the “BIG” picture. Make sure you have a complete understanding of these “key” customers.
- Who buys your product or service?
- Who makes the decision to buy? Often several people influence the buying decision, but rarely does a business explore more than a couple of choices.
- Why do they buy your product or service? The buying decision also brings a service level commitment into the relationship so quality make a difference
- Why do they buy from you? Common sense tells us that your business delivers well in relation to other suppliers on the things a customer value most. Research should remind you that “price” is only a small factor in the buying decision. Don’t get caught in "lower price means more sales." This strategy usually places a heavy demand on your staff and generates less profit for you to accommodate the sales increase therefore; you may lose more than you gain.
Decide which option for growth best fits your business.
- Can we ride a wave of increasing demand?
- Should we persuade them to give us more business?
- Should you add a product that your customer needs to complement your current offering?
- Can you increase demand through advertising or other methods?
Set good goals and begin to work with your customers. The best advice in business is to constantly remind yourself and your staff: “People do business with people, not companies, products or brands.” They do business with you for a reason. Find out that reason and explore the endless possibilities.