The good news is, according to the Bureau of Labor Statistics, almost 80% of businesses survive their first year. Fifty percent survive their fifth year. The bad news is, only 30% survive their tenth year of operation. Businesses need to constantly try new things and strive for growth. As the saying goes “You grow or you die.”
Continued growth and sustainability are of paramount importance in having a successful business model. There are many ways to achieve them. Here are several tactical approaches to grow your company:
Customers and Clients
You must not only strive to continually get new customers, there must be an effort to retain existing ones. According to Robert Gauvreau, in a recent article for Entrepreneur magazine, “You’ll want to get in touch with more potential customers or clients. That means you should focus on increasing your leads and conversion rate to make more sales.” Consider a customer referral program, if cold calling is difficult for you. Increase your visibility in the community. Meet more people and/or to get to know people better. Be certain to measure those contacts and determine what specific tactic is resulting in a higher rate of conversion, then increase that effort.
Simply put, as you try to increase your sales revenue, do not forget to monitor your capacity to be able to provide your product and/or services as your business grows. As your sales increase, remember to meet the increase in demand with the ability to provide the same level of service or quality of product your existing customers are used to receiving. Gaining one customer and losing another one is not acceptable. Keeping both is the key.
In these inflationary times, price increases have become almost second nature. But, it is the opportune time for you to re-consider your pricing structure. The objective should be to increase the amount of your average customer transaction over time. If demand for your service is strong, you should be able to increase your rates without losing customers. One way to address your pricing is to evaluate your competition. If their rates or prices are above yours, there could be an opportunity to increase your prices and still be below theirs. If your products or services are priced above theirs, you might have to stress the quality of your product, but address helpful or ancillary services that you offer which puts your firm in a stronger position, yet is able to generate more revenue.
Along with pricing, you must have a handle on your costs. Author Meredith Schmidt explained the approach when she said recently, “Before you price your product, you need to know how much you spend to create it. That means calculating every cost that goes into manufacturing or acquiring each item. If you purchase products and resell them, add up the costs of buying and shipping the items. If you make the products yourself, include creation costs like materials, development, manufacturing, and overhear. Once you know how much you spend on products, you have your break-even cost, or the minimum amount you must sell the products for to earn back the money you’ve invested in them.” Once you know your costs, then you can use that information to build your pricing model that was discussed earlier.
Making an initial sale to a first time customer is a giant leap for every business. From that time forward, you are no longer ‘cold calling’ that business. The sales cycle has gone to a new level. A relationship has started, now it is up to your sales staff to follow through and make that first sale successful, from beginning to end. Once the initial sales cycle is completed, it is time to move on to the next phase, repeat business. Most industries have the opportunity for repeat business, irrespective of whether they are offering products or services. Regardless of what that next sale is going to be, one key element of growth for your company will be to define and execute another sale or service, then a third sale or service. Be intentional about the sales cycles for each customer. Do everything you can to keep customers, once you have them.
By being aware of the above tactical suggestions and doing something about them, you can beat the Bureau of Labor Statistics data regarding business failure. Instead, you will be able to continue to take your company to new levels.