Growing your business is a good problem to have, right? Many small business owners are often faced with this challenge and struggle simply because they don’t know where to begin and they start implementing many ideas at once resulting in a loss of focus and eventually profits. As Confucius says “the man who chases two rabbits catches none”. You started your business to provide a service and make money and now that your business is on a path, it is time to focus on strategies that will grow your business.
According to Jay Abraham, there are 3 ways to grow any business: Increase Your Number of Customers; Increase the average transaction value; and Increase the number of transactions a year. But what about increasing your profit by transaction? As we all know, profit is the amount of money that is left over after running the business, so that is the plus 1 idea or bonus way to grown your business. So how do you execute one or all of these growth models without knowing the marketing strategies that drive results? Here are Jay Abraham’s 3 Ways to grow any business plus my bonus idea with proven marketing strategies.
1) Increase Your Number of Customers
This is all about the math. Figure out how many customers you have now and every new customer you add will grow you business. The focus with this method is simply to look at your attraction and lead generation strategies. Are they effective and are you converting customers? Are you fishing in the right ponds? To increase your number of customers, you first need to fill your pipeline with potential customers and that is all in your marketing tactics. The second requirement is to convert those potential customers into real customers and that is all about your offers and value proposition. Look at the ways you are marketing, who you are marketing to and make adjustments. Evaluate your offers and increase what your customers receive for the price you are charging and increase your follow up strategies on customers that you did not covert right away.
2) Increase Average Transaction Value
The next way to grow your business is to increase your average transaction value and you can achieve this by:
- Raising prices- People will pay if you are delivering value so consider raising your prices. This will increase your profits significantly. Yes, you may lose some customers but most will be willing to stay for the value, convenience or ease of your solution.
- Upsell or cross sell additional products/services. – Simply think about McDonald’s “Do you want fries with that?” – Studies have shown that 35% of people take the upsell every time. That is pure profit. The other method is to offer additional products/services to your same client base. A good example of this is to offer a small add on that complements the product or service your customer purchases. For example, a bakery can cross sell 6 cupcakes or a cake knife or candles to go with a cake purchase.
3) Increase Number of Transactions
The third way is to increase the number of transactions or simply stated, increase the number of times your customers buy from you. The best type of revenue is recurring revenue. Look at your business model and define ways to add additional value to your customers so they by your product and/or service multiple times a year. My favorite strategy for this is loyalty programs and continuity sites. Think of DVD of the month club and how you can apply this model to your business. For example, a local spa offers a membership program where you pay a reduced rate once a month and are entitled to a massage or facial each month. A consultant offers strategies and tips delivered via a newsletter each month.
4) Increase Profit by Transaction
The last method is to look at your profit models because let’s face it. The money that counts is the one that either goes into your pocket or is available to reinvest into your business. This is where you take a hard look at your process to see if you can reduce your cost basis. For example, can you buy your raw materials better? Can you eliminate human touch points with automation? Can you combine functions or process to eliminate waste?
You can also grow your business by increasing your profits. Let’s say for example you reduce your expenses by 5% – that goes right to your bottom line and grows your company.
Growing your business is the #1 focus of any entrepreneur and the successful ones look at all four ways and develop strategies to get them to the next level. So, your homework is:
1) Network with somebody selling to your customers and leverage their tactics to attract new customers.
2) Create a bundle package by offering something in addition to what your customers want to purchase and that isn’t a huge investment for your customers. Think fries with that?
3) Create a recurring revenue model. Think of product or service you can offer that you sell in frequency.
Look at your organization and how you can become more efficient and reduce your overall cost structure.