7 Ways To Grow Your Business (at little or no extra cost!)

12th February 2021 By Gordie Smyth Tips

Here’s a thought:

The business is there to serve you, not the other way round.

The problem is that most business owners feel like slaves to the business – they feel out of control, they feel like head down carry on is their only option, they’re forever concerned about cash flow and there’s simply not enough hours in the day.

But who assists business owners to run better businesses, to run a business that serves them? We feel that accountants are ideally placed for this, but most business owners don’t have this relationship with their accountant.

No doubt you’re brilliant at what you do, but sadly that’s not enough on its own. What about understanding and leveraging your numbers? What about managing your cash flow? What about developing a one page business plan? What about leading the business and your team a bit better?

This blog introduces the 7 Ways To Grow Your Business, and a small improvement in each area will make a huge difference to your business (in fact, when we pulled the numbers together they even shocked us!).

1. Increase your customer retention rate

What if that customer who moved on after two months was instead a customer for two years? What if they stuck with you for twenty years?

It’s much cheaper to make sales to existing customers – in fact statistics show that it’s six times easier to make sales to existing customers than it is to new customers.

What are you doing to delight your customers and turn them into fans? Do you know what your customers want? What is your current communication strategy with your customers?

Too many times over the years we’ve seen businesses focus on new business at the expense of the customers they’ve already got. It makes no sense to bring new business in through the front door only to lose existing business out of the back door.

2. Generate more leads

Do you know the difference between a lead, a prospect, a customer, a loyal customer and a fan?

The sales funnel begins with someone who’s in your target market but who hasn’t yet responded to any of your marketing. When that person responds to your marketing or makes an enquiry, they become a lead. It’s vital to follow up on all leads in a timely fashion and give people every opportunity to buy, turning them from leads into prospects. At this point, we move from the lead gen phase to the sales phase, and your prospect becomes your likely customer. After a single purchase, they become your customer, and after repeated purchases they become a loyal customer. Finally, we want to turn our loyal customers into fans, who tell everyone about their experience with us and generate referrals!

What does your Customer Relationship Management (CRM) system look like? It doesn’t need to be complicated or expensive, but you do need something that’s kept up to date. How do you keep track of your leads to ensure they’re promptly followed up on? Who is your dream buyer? Where do they hang out? You need to understand this in order to tailor your marketing to the right people.

3. Increase your conversion rate

Are you measuring your success at converting leads, quotes and proposals to sales? Do you regularly review why you aren’t converting more of them? Are there stand out performers in your team who have a higher than average conversion rate? Are you using the right people in the sales process? When you deal with potential customers, are you dealing with the decision makers?

We know what it’s like trying to build a business with all the different hats that business owners have to wear, and in our experience not enough attention is given to the numbers (and when we talk numbers we’re not stopping at the P&L and Balance Sheet, but what goes on under the bonnet of a business).

Your conversion rate might be sales made as a percentage of proposals delivered or sales meetings held. If you’re not measuring these, you need to start NOW.

4. Increase transaction frequency

How do you get your customers to come back to you more often? They’ve paid for something once, they like you, and you’ve probably got loads more to offer them. If you can demonstrate the value of something, your customers will be back for more! As we’ve said, it’s much easier and cheaper to make sales to existing customers than it is to new ones, since some trust has already been established.

What are you doing to encourage your customers to buy from you more often?

Get closer than ever to your customers. So close that you tell them what they need well before they realise it themselves. – Steve Jobs

5. Increase transaction value

Increasing the transaction frequency is one thing, but how then do you make the most of it to maximise profit?

When was the last time you reviewed your prices? It may be time to increase them!

Don’t make the mistake of thinking that you have to be the cheapest because we can assure you that most people aren’t price sensitive but value sensitive (otherwise we’d all buy the cheapest everything!). Understand your market, yes, but also understand your value. Get super clear and confident on your value proposition. Understand your margins and STOP sacrificing your margin by offering discounts.

Create a variety of upsell opportunities and add-ons that you can confidently pitch to new and existing customers. Huge businesses like Apple and McDonald’s are brilliant at this but smaller businesses less so. That’s often because we’re not entirely comfortable with “selling”. In our business we’ve framed sales as our ethical obligation because we believe passionately in the value of all of our services (or we simply wouldn’t offer them).

6. Reduce your cost of sales

The chances are that within your business there is wastage – it could be time wastage, it might be product wastage – but the point is to get more efficient because every marginal gain adds up to more profit on your bottom line. Review your variable costs and consider how you can increase efficiency and reduce waste.

For a service-based business like ours, we can get more efficient by having the right people do the right jobs. If a job takes a lot longer than it ought to, we make no margin and it’s incredibly easy to become a busy fool.

For a goods-based business, when was the last time you negotiated price with your suppliers? How else might you increase your mark-up?

7. Reduce overheads

You should regularly review your P&L and seek to separate the fat from the muscle. Whilst the muscle requires investment, the fat can generally be trimmed.

Many businesses carried out this task in 2020 when the global pandemic hit, but it needs to become a habit – a regular part of proactive profit planning.

If you’ve not re-negotiated your rent or switched energy suppliers or looked at re-financing to reduce interest charges, you should.

In summary

If you make even just a small improvement in each of these areas it will have an incredible impact on your bottom line. Get in touch if you’d like a copy of our calculator which proves this.

Don’t be a slave to your business and get really explicit as to how it’s going to serve you.

Flower aren’t your traditional accountants – we’re a partner for ambitious business owners, and our name derives from a focus on growth.

We’ll make your finance function more efficient, more accurate and more powerful.

But, most of all, we’ll really care.

Arrange a no obligation chat with a Client Partner to discover how we can support your growth ambitions and make 2021 a year to remember for the right reasons.