So your business is not growing. What do you mean exactly?
- Is it that people are not buying from you and you want them to start buying?
- Is it that customers buy from you once and never return?
- Is it that you are not seeing any profit from the business?
If you answered “Yes” to any of the questions above, check out this post first before you continue reading. It will give you some detail about the basics of business growth and how to address the above issues.
For this blog, I will assume that your business used to be successful, meaning that customers were buying from you, your customer retention was good, and your business was profitable. But today, you find yourself in the situation where your growth has stagnated and your business is not growing. What can you do
1. Keep improving your skills
The extent to which your business can grow is limited by your knowledge. If you do not know how to manage your business well, it will struggle. This will affect your growth. If you are not willing to acquire knowledge in the areas you are lacking – or hire staff or consultants to work with you to provide that expertise – your business will struggle.
As you run your business, ask yourself. Where is your knowledge lacking? If most of your customers are on Facebook, do you understand Facebook marketing? If you are a business that holds inventory, how are your inventory management skills? How good are your financial forecasting skills? Are you able to create and apply a strategy to improve your cash flow if you are dealing with customers who buy on credit?
Assess yourself and grade yourself in the areas of business management that are needed for your business. Then put effort into building up your knowledge, either online, from books, from business mentors or from business coaching services so that the knowledge will help take your business to a higher level.
2. Set your goal & growth strategy
First of all, if you do not have a business growth objective, where are you going?
What goal have you set for growth? Is it to double your sales? Wow! To grow your profits every year by 300%? Fantastic! May I see the strategy and breakdown of activities that you have designed to achieve this goal?
Unless you have a clear strategy and action plan that you keep testing and adjusting based on what you are learning through experimenting, you will just be trying anything in hopes of getting your business to grow.
When you plant a tree, it will only grow well when the conditions are right. If there is no sunshine, or no water, or if it is being starved because there is not enough soil for it to get nutrients from, it will die. If you want a good harvest from that tree, you will need to take certain actions, monitor how the tree is doing, monitor the environment and make adjustments so it can do as well as possible.
Growing a tree is the same as growing a business. You need to know what kind of environment you are in, what is needed to stimulate growth, and you need to continuously adjust if what you are doing is not working. Or if the environment is changing. And if you do not have the knowledge, you need to ask an expert to take a look and offer you advice.
3. Change your approach
Stop doing the same thing over and over if you are not seeing results.
This is related to what I said above. In business, like in life, your need to keep making adjustments. But you cannot just make any kind of adjustment. You need to be able to determine what outcome you want to achieve (your goal), how to achieve that outcome (your strategy and activities) and you need to monitor the results (your indicators).
If you just try anything, it will be like picking up a handful of rocks and throwing it at birds hoping to hit all of them. Maybe you will get lucky and hit one, but most of what you throw will not achieve the desired result.
Set a goal, determine your strategy and actions, test it, monitor the results, and adjust as needed.
Have a look at this post about how to design a business growth strategy for your business.
4. Accept (good) advice
Ah.
Yes, I know that you know your business better than anybody else. Yes, I know that you have been running this business for a long time. Yes, I know that you have seen some success from the business. That does not mean that you do not still have something to learn. Something that will help you to take your business even farther.
When someone gives you advice, particularly if that person has a track record in business, before you reject it, consider it carefully. Is there any part of that advice that you can test in your own business? Remember what I said: experiment, monitor and adjust.
Unless the advice you have received is clearly intended to kill your business, maybe you can test out part of it to see if – maybe with some adjustment – it can serve to carry your business to a higher level.
5. Stop competing on lowest price
The only way to win with this strategy is if indeed you are the cheapest. But that will usually require you to be able to purchase in bulk, bigger bulk sizes as compared to your competitors.
More importantly, you are not building customer loyalty. If the only reason I am buying from you is because you are the cheapest, then obviously I will drop you the second I am able to get that product at a cheaper price from your competitor. It also likely means that I am going to be holding on to my money very tightly, not being willing to spend money on anything else in your business.
So how can you change this? The key approach is to distinguish yourself with a unique selling proposition – a USP. Maybe by selling different products. Or by having the best customer service. Or by having an attractive ambience in your business that people enjoy coming to you.
6. Systemise your business
If you do not have a business plan, you are like somebody jumping into the middle of the Atlantic ocean, having no idea where the shore is, but saying that you want to reach the shore. How will you get there? How do you even know which way to go when you start swimming? Are you even able to swim nonstop for 24 hours? Where will you get water to drink?
Having a business plan forces you to take a look at your environment, to make projections, to analyse and to prepare. It forces you to plan. To plan your budget, how to increase your profits, effective marketing and cost management. If you do not make a plan, you find yourself at the mercy of whatever happens.
Additionally, not having a plan means that you cannot monitor your business. Maybe you are running online marketing advertisements on Facebook. And those ads are bringing in a whole lot of people to your Facebook page. But are these people actually buying from you? If they buy, are they buying the products that have high profit margins? Are you even sure which of your products have the highest profit margins? Do a cost analysis, and it may surprise you to find out that the products you thought were doing well are actually losing money.
Being systemised will not guarantee that your business will succeed. But not being systemised will guarantee failure.
7. Market your small business correctly
It takes money to make money. How much have you budgeted per month to spend on marketing and promoting your business? A general rule of thumb is that, at the least, you should be spending 7 – 9% of your annual revenue on marketing.
Another general rule is that – if your marketing is effective – there is no maximum amount. Once you have discovered an effective marketing strategy that is increasing your profits with higher amounts than what you are spending on marketing, the only reason to stop spending that money is if you want to stop growing!
Also pay attention to who you are marketing to. Like the example I gave above, are you bringing in the right kind of highly profitable customer? Or maybe you are only focusing on getting big clients. Yes, that would be fantastic, but your business also needs small clients. If you mainly depend on a few big clients and 1 of them drops you, your business may suffer heavily. Whereas if you have many smaller clients, losing 1 or even 5 may not affect your business at all.
8. Increase sales and repeat business
If your business is not growing, you will obviously try to get new customers. After all, new business equals more revenue and more profits. However, don’t forget about the customers who have bought from your before.
Customers who come back to your business and buy from you again are the people who will keep you in business and help your business to grow. Getting customers who have bought from you before to buy from you again – retaining customers – is one of the best ways to grow your business. If you need some advice about how to do this, check out the following posts:
- Why are my customers leaving me?
- 11 basic strategies to retain customers
- 6 advanced strategies to retain customers
- 10 easy ways to get more customers
9. Save pounds, not pennies
Every business owner understands the need to be careful with how you spend money. But not every business owner understands that being cheap can kill your business. Are you always looking to buying your products from the cheapest vendors? Are your customers complaining about the quality of certain products? If you hire people to work for you, are you always trying to push them to work for the lowest possible cost?
Yes, you need to keep costs as low as possible. But you also need to take into account what quality level you want your busines to stand for. This is also why it is much better to not compete on price, but rather on quality or even perceived quality.
Buying at the lowest possible cost may reduce the amount on your invoice. But if the quality is not good, your customers will drop you as soon as they find somebody offering a little better quality. Hiring the cheapest possible employees may keep your business costs low, but how much time is wasted because of the mistakes they make? Mistakes that you then have to correct. Even worse, it may encourage some staff to steal from you.
Do not be the business owner who focused too much on today’s savings and lost tomorrow’s winnings.
