Define Your Goals
Defining where you want the company to go and where you want to go as a person is essential to building the business you want. It helps make the day to day decisions because you know which direction to go.
WHAT DO YOU WANT FROM THE COMPANY?
When you started the business, why did you do it? Was it the money? The freedom of being the boss? Love of the trade? Or something entirely different. Sometimes as we go down a path, we lose our sense of direction. The best thing to do is to take a second, reevaluate the direction you’re headed and make sure it’s the way you want to go. The same goes with running your company; make sure that the company is heading in the direction you want it to be.
You need to take a good look at what you want from the company, that way you can work towards it. Do you want to build an empire that takes all your energy, or are you looking to build something more modest that allows time for you to do other things?
IS THE VISION BIG ENOUGH?
Your vision statement should be the overall dream for the company. The best product or service in your industry? Largest job producer in the community? Most impact? Etc. Some have this in place from day one. It can be changed along the way; if you don’t have one yet, take the time to decide what the vision for your company should be.
This statement defines the direction you want the company to head towards; its north star. The best ones are focused on the impact they will have on people. For example, IKEA’s is, “Our vision is to create a better everyday life for many people.” It’s short and impact-driven. Another example is Patagonia’s, “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” They outline the vision for their products and the impact they envision for the planet.
TURNING THE VISION INTO AN OVERARCHING GOAL
Now that you’ve revisited the vision for your company, you need to turn that vision into an overarching goal. What needs to be achieved to fulfill the vision? This goal is something that both you as the owner, and your team can work towards. It will not be achieved overnight and may take years, but it is a goal that is meaningful.
BREAKING DOWN THE GOAL INTO SHORT TERM GOALS
Looking at the overarching goal, what do you need to have done this year, quarter, and month to make progress to the larger goal? Do you need to hit a higher level amount of sales or get new clients, hire a certain number of people, automate systems, buy equipment, among others? You need to break it down into bite-sized pieces and ultimately work backward to see what needs to be done to achieve the bigger goal.
Start with what you want in life and from your company. Define the vision of your business and turn it into an overarching goal. Break that goal down into smaller milestones that are manageable and allow you to celebrate wins along the way. It’s not always the destination you seek, enjoy the journey there.
When many business owners think about increasing their revenue for the year, the method that comes to mind right away is getting more customers to buy their products or services. While this is one way to do so, several other ways may be more beneficial for your company.
1.) RAISE YOUR PRICES:
You may be surprised to find out that you are undercharging for your products or services. Many times when owners raise their prices, they find out that it was not as bad as they thought. You will lose some customers, which is ok, sometimes it is better to let go of the lower-paying clients. When you go about this tactic, ask yourself, “What would happen if I raised my prices 10%? 20%? 50%? Or even doubles my prices?”. Think about if there is a market to sustain these new prices. What would you need to do from a customer experience standpoint to ensure that their experience is congruent to the higher prices? From experience, I can tell you this; don’t be afraid to raise your prices.
2.) INCREASE HOW MUCH A CUSTOMER BUYS FROM YOU:
If you can increase the average ticket size of each transaction without decreasing the frequency that they buy from you, this method will help you increase your total revenue. One of the popular ways to take advantage of this is to offer an upsell; this does not need to be sales-y, just offer something that would go well with what they are already buying. Think of the, “Would you like fries with your burger” concept when creating upsells for your company.
3.) GET YOUR CURRENT CUSTOMERS TO BUY FROM YOU MORE OFTEN:
This one may sound too simple, but I’ve seen many business owners overlook this. The people that have already bought from you know how great you are, and would be happy to buy again. It is much easier to get them to buy from you again than to get a new customer. Send them a reminder occasionally to let them know you are here to help. Make sure that you are top of mind when your customer thinks about someone in your industry. Another way to use this method is to build a recurring model into what you already sell. Your main product or service may not be something that can be done regularly however, I’m sure there is something goes with that product or service that could be done on a recurring basis.
4.) GET MORE CUSTOMERS:
There are two main ways to go about this; inbound marketing, such as content marketing, optimizing your website for search engines, and social marketing - and outbound marketing, such as direct mail, email marketing, and events. Inbound marketing tends to be the best long term solution for getting new customers as you are typically helping potential clients before they even buy, building the connection. Compare this to outbound marketing where you are trying to yell the loudest, “Pick me, pick me!”, which one do would you prefer as a customer?
Another great way to get more customers, outside of marketing, is referrals. One of the simplest ways to do this is to ask your customers if they know anyone else that would benefit from your product or service. Referrals are going to be the warmest leads you will get as a business. Many times, they are ready to buy right out of the gate.
Armed with these four methods to increase your revenue, go out and take action. Give one method a try and see how it works for you. Imperfect action outperforms inaction.
1.) DON’T COMPETE ON PRICE:
One of the biggest factors contributing to low profit margins is not charging enough. If you are making the price your competitive advantage, you will lose in the long run. If you get a customer because you have the lower price, they will go to the next guy that beats you on price. If you continue this cycle, it becomes a race to the bottom. No one wins that race. This includes always offering discounts; it is cutting into your margins.
Here’s an example, you have a $1,000 product. After all expenses, your profit margin is 20%, giving you $200 in profit. If you raised the price of this item to $1,200, just a 20% increase in price for your customer, your profit would be $400 on this sale. Doubling how much you make. You could sell one at a higher price and make as much as you do selling two at the lower price point. Isn’t that worth it? Fewer sales to take home the same amount of money.
2.) TRIM YOUR OFFERINGS:
For this method, you need to take a look at everything you are currently selling. Dive into the numbers. What is the most popular? What brings in the majority of your profits? On the other side of this, what do you offer that is the least profitable and brings little to no value to your company? Offering too many things can cut into your margins because of the cost to be able to provide all of these is high. Compare this to a narrowed focus where you provide a few core offerings that have high margins. You need to trim the fat in your company, so to speak, and narrow down your offering to what sells and is profitable.
3.) OPERATE EFFICIENTLY:
If the systems that you have in place to operate your company are inefficient, this can cut into your margins significantly. It can limit your capacity with your current expenses. Once you can operate more efficiently, your company can handle more business for the same expenses.
Here’s how you can improve efficiency; examine the processes and systems within your business with a magnifying glass. Ask yourself or even the employees, “Is there a better way to do this specific task or process?” If there is, test it out, and see how it compares. You’d be surprised how often there is something that can be improved.
4.) FIRE UNPROFITABLE CUSTOMERS:
Yes, you can stop working with customers and clients that are an absolute headache. We all have a few, and it can be one of the best things to let them go. We’ll call them PITA (pain in the a**) clients. Many times they are the least profitable, yet they end up taking more resources than they should. Once you let these PITA customers go, you can focus on getting more of your ideal customers, the ones you love to work with. You’ll be happy with this decision in the long run.
So how do you go about “firing” PITA clients? Complete your current commitment with them, and just simply say this:
“Hi (name), We’ve decided to shift our focus to serve a specific subset of customers looking forward. With that said, we unfortunately will not be able to serve you further. As you look for another provider, I recommend trying (competition). Thank you for your understanding. Below outlines the action steps moving forward. (outline action steps)”
This is more of a soft let down, not directly putting blame on either party; cutting ties cleanly and professionally. Plus it sends your trouble clients to your competition, a nice bonus.
Content marketing is a popular way to attract new business for many reasons; it helps potential customers become familiar with your company, demonstrates your company is an expert on the topic, it is a long term strategy, and in some cases - significantly lower costs compared to other methods of client acquisition. This can be accomplished through a variety of modes including; articles, podcasts, videos, ebooks, etc. The main goal is to help potential customers before they even reach out to you to solve their problem.
THOUGHT LEADERSHIP - ESTABLISHING YOU AS AN EXPERT
One of the main benefits of content marketing is that it establishes you and your business as a thought leader in your field. This provides a significant differentiator between you and your competition.
Think of it from a customers standpoint. Three companies are providing the same service; two of them go the traditional route and only advertise, but there is nothing that differentiates them from the others - they provide a commodity. The other business, however, produces educational videos that help you understand how the industry works, how you can do it yourself (not that you want to or have the time), how they operate, and honestly try to help you out. Because they produce so much content, you feel as if you already know everything about the company and its people. Given the three choices, who would you choose?
Similar to the example above; potential customers know you on a deeper level. You have provided so much value up-front with no expectations of return, they feel that it is a simple choice to pick you. And since they already know everything about your business, and you have answered their questions before they even talked to you, there is a lot less buying resistance. What we would consider very “warm” leads.
Do you prefer to buy from people you know or strangers? Probably not from strangers; that’s why so much money is spent on advertising to build awareness and familiarity. But building this familiarity through content can be a more cost-effective way to do so.
This type of marketing is a long term solution for your company. You are essentially building digital assets that can be repurposed and updated over time. Once you produce something educational, it can be consumed years after and eventually lead to a sale.
This brings up another potential advantage to solely relying on traditional marketing & advertising; the cost savings. Content marketing will be slow in the beginning, but with time the flywheel effect begins to kick in. As more and more content is produced, older stuff is being viewed along with the new stuff that is coming out; and readership growing over time. If you were to stop producing content, new business would still come in (though it would slow). Compare this to traditional advertising; when you stop advertising, no new business comes in from this method.
Do you use content marketing as part of your customer acquisition strategy? If not, you may want to consider at least doing more research into it; maybe even giving it a try.
Enjoy The Process
When building a business, it can be easy to get caught up with the constant stress of day to day operations, along with the stress of wanting to grow.
At this time it is important to enjoy the process. Yes it may feel like a hundred things are flying at you at the same time, but you are working in the long term.
BUILDING A BUSINESS THAT HAS AN IMPACT ON ITS COMMUNITY AND IS MEANINGFUL TAKES TIME.
Your business will require most of your waking hours for some time. That is just part of creating something great. But knowing this, be more thoughtful about the process. Put forth the extra effort to enjoy the work you are doing and the stage you are at. If you are trying to expand, have patience. As long as you are actively working to do so, it will get there; but it does not happen overnight.
The moral of the story: Have patience and be consistent with your efforts.
If you take a look at all of the bigger businesses in your industry to see how they got to where they are today, you’ll see that it was years in the making. Even the ones that seem to be an overnight success, there were years of work put in before that rapid growth happened.