As business owners, we are all interested in attaining growth. And usually, to grow a business, funding is required.
Research by SME Finance Forum shows that there is a huge funding gap for SMEs. Small businesses are less likely to get a loan than big businesses. Also, if they do get a loan, the loan is often not the size that they asked for.
No money from funders = no growth, right?
I believe that for small and medium businesses, organic growth is the best growth strategy.
Organic growth means growing your business from the inside – by increasing your sales and getting higher profits – as opposed to growth from the outside (through acquisitions, mergers etc).
I believe that organic business growth also results in a more sustainable business. One that will last.
This is because you grow through acquiring highly profitable customers, retaining more customers and creating products and services that you already know that these customers will certainly buy from you.
Leading to higher profits.
Higher profits also mean higher financial reserves.
And higher financial reserves mean having more money available to invest in your businessor in market opportunities. Without having to depend on money from banks or other funders.
However, organic growth is not the fastest way to grow your business. It takes time, effort and results can come slowly before growth starts picking up.
That means that if you choose to follow an organic growth strategy, you should also focus on improving three other things:
- tightly managing your business finances. Running a lean business where you keep expenses as low as possible and plug all money leaks.
- attracting the right kind of customers. Knowing what kind of customer brings in the highest profits, why they buy from you, how to attract them and how to retain them
- increasing your sales through one of these 4 ways.
Once you have these basics in place, the key is to look for additional ways to boost your growth.
One way is grow your business faster is to double your sales. And then keep repeating this.
- If you want to double your sales in 1 year, you need to grow by 100% in 1 year’s time.
- If you want to double your sales in 2 years, you need to grow by 41.5% every year.
- If you want to double your sales in 3 years, your annual growth rate needs to be 26%.
Maybe these percentages seem too high to you. Maybe in your industry, average annual growth rates are at 5% or 7%. And maybe you have been looking at them to determine what is an acceptable rate of growth for your business.
But let me ask you this question.
Has your business ever managed to increase its revenue? How did you achieve that? Was it by accident, an unexpected new customer or an unexpectedly large sale?
Did you ever consider that it might be possible to repeat this?
If you understand the dynamics behind what happened, you can repeat it. And once you know the dynamics, you can set a clear goal and then start workingto achieve it.
Like everything in life, progress can only come again and again if you set clear goals from the beginning.
How to double your sales in 3 years?
The idea of doubling your sales in three years may sound very ambitious. You need to achieve a 26% growth rate every year for three years.
So how can this be done?
The key is to focus on the right things and to make sure that you set tight, measurable goals.
1. Visualise the future you want
Where do you want your business to be three years from now?
And once you achieve that ambition, what will your business look like? To answer this question, you need to envision the details of your future business. Here are some questions to help you:
- Where will your business be located? If in an office building, what will it look like? How many offices? What part of town will it be in?
- What kind of customers will you be serving?
- What kind of products and services will you be selling?
- What kind of employees will you have (if applicable)?
Once you have a clear picture, you can start setting your goals.
2. Set clear and measurable goals
To be effective, your goals should always include a number, a money sign or a percentage. For example:
- three years from now, my business will have attracted 32 (number) new customers
- three years from now, I will be doing €60 000 (money sign) in yearly sales
- three years from now, our annual customer retention will be 75% (percentage)
When you set clear goals like this that can also be measured, it helps you to focus the attention of your entire business on achieving these goals.
Make sure to keep your goals realistic. If you are currently making €20 000 per year in sales, it may not be realistic to set a goal to achieve €2 million in sales three years from today. But if you have a clear strategy and action plan to achieve a very ambitious goal, go for it!
3. Determine your action plan
Now that you have set your vision of the future and your goals, you can start creating a list of ways you can achieve those goals and double your sales in 3 years.
To determine your action plan, keep the goal in mind and work backwards to determine how you might get there.
So, for example, if your goals is to be doing €60 000 in yearly revenue three years from today and today you are making €30 000, what possible steps did future you take:
- to get to €60 000 from €50 000
- to get to €50 000 from €40 000
- and to get from €40 000 to €30 000?
Then, determine those activities and projects that will bring the most value to your business and focus all your efforts on carrying out those activities.
Also set a timeline and a budget for each of the activities that you choose.
Your timeline should include monthly, weekly and even daily targets so that you can see how well you are progressing.
4. Work on schedule and within budget
Once you have prioritised your activities and determined your action plan, your next step is to focus on carrying out those activities within the time constraints that you set for it and within budget.
If you need a detailed monthly budget template, you can use this one that I created for small and medium businesses.
Use your monthly, weekly and daily timeline to monitor your progress and make adjustments as needed.
Use this as your guideline and you will soon start to see results.
To double your sales in 3 years requires a clear focus
Having a clear vision and objective forces to you clarify your thinking and your strategy.
When you focus your strategy, you can focus your efforts and those of your employees on the goals that you want to achieve: to double your sales in 3 years. Many people and businesses work hard, but the ones who get good results have focus.
When you have a clear focus, you start asking different questions. Questions like, Is this helping me get to where I want to be?
Once you know where you want to go and what you need to do to get you there, you can delegate or outsource everything that is not helping you achieve your goals.
Once upon a time, somebody asked a business owner the following question. If you could only work on your business for 2 hours per day, what would you focus on?
What would be your answer to that question?
Well, then focus on that thing for 8 hours per day and delegate or outsource all other things.
This is how you double your sales in 3 years.