Growth

Strategies to Grow Your Business

Growth can come in many different forms (even in pruning… more on that another day). If you’re planning to grow your business this year you need to get very clear on the HOW. How are you going to grow? That can be the overwhelming part, so let’s simplify it! There are three easy growth areas to consider.

Volume - Increase the number of sales you make Volume is all about the quantity. You want to sell more of the thing you already do. This strategy usually involves acquiring new customers which can be costly because it requires more spending in marketing and getting new customers in the door. Be sure you are creating lasting customers and not one time customers.

Price - Increase the price of your service If you want to increase your prices you need to be sure that your value aligns with the price increase. The value you deliver should out weigh your price. This results in delighted customers! If you’re not comfortable with a direct price increase think about how you could add value, then increase the value and the price. Is there a way to enhance the customer experience (this is golden)?

Services - Increase the number of services you offer Adding new services is a great way to increase sales. Figuring out what to add can be simple, but many businesses don’t do it. What is this simple step? ASK. Simply ask your current customers what else you can help them with. What are their biggest frustrations? Now figure out how to solve their frustrations.

These three strategies can be used alone or together. But remember, Focus is key. Depending on your size, your team, and your goals, you should only focus on one to two things at a time. Focus is what gets work done!

What are you going to do to grow your business this year?

If you’d like to grow your business but you’re not real sure where to start, contact us for a free consultation, and we’ll see how we can help you reach your goals.

Growth Cost Money- Avoid the Unexpected

I was recently talking with a client who is at the end of year 1 of his 3 year growth plan. We were recapping with an After Action Review (a report of what worked and what didn’t), and I was surprised by some of his comments. Although, in the beginning of year one he created a written plan for growing his business, he never thought about the additional costs he would have to support that growth.

Fortunately for him, he had savings socked away so he didn’t have any hiccups in his plan. But without that savings his growth plan could have been a flop.

So what costs can increase when you’re growing your business...

If You're Adding New Services-  Many times a business will grow by adding new services. This requires an investment in education, new processes, and marketing for the new service. Learning will not only cost money but time as well. Be sure you have planned for both!

If You're Hiring-  Many times if you are increasing your business volume you will also need to hire. You’ll need to budget for the increased salary as well as payroll taxes, benefits, paid time-off, and workers comp insurance.

If You're Increasing Sales-  If your growth is coming from increased sales you will probably need to increase your marketing budget. This will involve time and money. Will you outsource this or do it in-house? Are you growing online or in a new region? Aligning your marketing needs with a marketing budget will help you plan accordingly.

If You're Increasing Production-  If you’re developing new products, or producing more products, you'll not only need to invest in more equipment but you'll also need more raw materials on hand. This could also lead to hiring, and increased marketing, which increases your upfront costs.

If You're Adding Locations-  If you are scaling your business by opening new locations you need to be aware of not only the upfront costs to open a location but also the ongoing costs. When adding locations you need to be focused on process development and improvement above all else. Clear and concise processes are the only way you can get your business to run without you there… and isn’t that the ultimate goal?

It's important to not only understand these costs but to also have them at the forefront of your growth plan. Failing to plan for these extra costs can be detrimental to your business if you don’t factor them in.

If you’d like to grow your business but you’re not real sure where to start, contact us for a free consultation, and we’ll see how we can help you reach your goals.

Growth Companies: 4 Numbers You Need to Know

Service-based business owners have no problem focusing on new customers and serving current customers. But many don’t know how to take their business to the next level. If you’re looking to grow your business, you must pay close attention to your financials and key metrics. Key metrics are financial numbers that you need to hit in order to reach your overall goals. When planning with clients I always tie a goal to a metric or target. How else will you know you achieved the goal?

Here is a list of 4 key metrics that are important to track in your service-based business.

Sales Close Ratio. You get this number by dividing the number of sales proposals made by the number of proposals you closed. This tells you the percentage of proposals you win. Obviously, you want this number to be high, but not too high. Chances are if you’re closing 90%-100% of proposals you make, you are walking away from money on the table.

Project Margin. This metric measures the profit you will make on each project you undertake. It is the percentage of project revenue - direct costs you will pay to complete the project. The higher the number the better!

Profit margin metrics will help you with making profitable proposals and driving overall profits. I recommend determining your lowest acceptable project margin. Then, when you are giving new proposals be sure to never go below your minimum.

Monthly Operating Expenses. Your operating expenses are the expenses you have every single month. Why should you know this number? Because this is what you will have to spend each month just to keep the doors open. You’ll spend this even if you have zero collections. I suggest taking your annual operating expenses and dividing by 12. This gives you a monthly average.

You can also use this number as a target for how much you should have in savings. In an ideal world having 3 to 5 months cash set aside would be sufficient. In reality, it takes dedication and time to get that built up.

Billable Utilization. This rate will help you track productivity. On an annual basis you’ll divide the employee’s total billable hours by 2,000 hours. This gives you each employee’s productivity. You should monitor this to determine if you have space to add more client work or if it’s time to add more employees.

However, I don’t think this number should be monitored by itself. An employee can have a low utilization rate but it’s out of their control. You must also look at overall profit, prospects in the pipeline, and marketing budgets.

Why are these numbers important for growth? Because growth cost money! Your business goals must be aligned with your resources (time, money, and energy) or you’re setting yourself up for failure.

If you’re struggling to monitor and track your financial information, contact us and we can schedule a free consultation to see if we can help get you on track.

3 Reasons Your Business is Not Growing

This was the year! The year you wanted to grow your business. However, you're just not seeing the results. You started the year out strong with high hopes but quickly got busy in the day to day activities. Being busy turns into exhaustion and before you know it you're burned out. Then the last thing you want to do is think about growing a business you're burned out in. Unfortunately, this is pretty common for business owners. Several (aka: a million) things went wrong in the business growth.

Here's the top 3 reasons I see for a business not growing:

  • No Clear Plan. When growing a business you should have a clear, concise, and communicated plan in place. And not just an annual plan. You need a plan that is broken down into quarters, then into months, and then into days. Yes, I said DAYS! You and your team should know what needs to be done each day to move you one step closer to the target.

  • Competing on Price. Unless you happen to be Wal-Mart, you should NOT be competing on price. Wanna know why? Because Wal-Mart will win on price every time. EVERY TIME. Competing on price is a race to the bottom. If you offer a low price this week, next week the guy down the street will go lower, then the following week you'll go lower, and so on. Before you know it you'll be wondering why you're not making a profit.

  • Shiny Object Syndrome. So you did happen to have a written plan for growing then... SQUIRREL! Letting yourself get distracted by the latest and greatest will stall growth. I know new technology is fun or a new business opportunity sounds terrific, but if you constantly get derailed and can't stick to a plan already in place, you won't be able to grow your business. Strategy is about what you need to say NO to.

So do any of the above reasons sound familiar? If so, don't beat yourself up over it. Recognize the issues, make a plan, and move forward. Make today the day you start growing!

The Clarity of Having a Business Coach

There are lots of articles on business coaching that spells out the "how" business coaching works, but not necessarily the "why" or the experience of coaching. My hope is that this post will give you the "feel" of coaching. When I first start working with a client I ask questions so I can understand where they are coming from and dig deep into how I can help. Here are a few responses I've received:

  • "I'd like to have more control over my business instead of it controlling me"

  • "I'm worried that I'm not making changes fast enough in my business"

  • "My biggest concern is getting new customers"

  • "I'm stretched too thin"

  • "I lose sleep over thinking about cash flow"

You can see that those are very personal responses. That requires a lot of trust. Trust and vulnerability. And sometimes that hurts. And sometimes it sucks. Few enjoy talking about weaknesses, but the only way to make a positive change (and business altering change) is to be honest and put it out there.

If I know my client's concerns, issues, and weaknesses I can work with them on making positive changes to help achieve their dreams. I create a space for them to feel understood, accepted, and open to digging deeper to what it would look like if they purposely worked on changing their actions or attitudes around a matter.

For example, when a client says "I'd like to have more control over my business instead of it controlling me", I might would ask:

  • Describe a normal day for me

  • What tasks are you doing that can be delegated to someone else?

  • If those tasks were delegated to someone else, how much time would that free up?

  • What would you do with the extra time? Could you use that time to sell more services?

  • If that means more time to sell, how much additional income could you make in 1 week?

  • What would that look like over a 1 year time frame?

What I've done in that example is to guide them to an end result that they are looking for (higher income) and away from the problem (not enough time in the day). The client is only thinking of the right now, but if I can get them to think in big picture and long-term results then there is a better likelihood of making a positive change.

Again, this is just an example. Each client is different and has different challenges and goals, but this is the experience of coaching.

My objective as a coach is to help you work through the challenges that you face as well as helping you see the value in making positive changes. I am also helping you with clarity, offering you a safe and confidential place, giving you someone to lean on, and helping you push trough to achieve your dreams (..oh, and becoming your #1 cheerleader).

If you think you could benefit from having a business coach, let's connect. We can schedule a free discovery call to see if we are a right fit for each other.

How To UN-Complicate a Strategic Plan

According to the dictionary, strategic planning is "a systematic process of envisioning a desired future, and translating this vision into broadly defined goals or objectives and a sequence of steps to achieve them." So what does that really mean?

In basic terms, it is a written plan that will help you reach your goals. It is a simple way to make sure everyone on your team knows what they are working towards, what needs to happen, when it needs to happen, and who's going to do it. If the plan is followed (with potential tweaks, as needed) at the end of the time period your business will be where you want it.

I call this a Growth Plan (you can read more HERE). For example, if you said you wanted to grow your revenues by 30%, your growth plan would detail the strategies we are going to use to reach the goal of 30%.

When setting up a Growth Plan we:

  • Determine your current position in the market - How you compete in the market, your strengths and weaknesses, study your competition, understand your business model

  • Develop your strategic parts - Where do you want to be in 3-5 years, what about in 10 years, what do you stand for, what's your business purpose, and what strategies do you use to compete

  • Document the Growth Plan - Overall annual goal, quarterly goals, and outcomes that we want. Also, document the actions to be done to reach those goals, details on who will do what and when they will do it.

  • Implementation of the Plan - Communicating the goals and strategies with the entire team, as well as monitoring the progress

Not so complicated, right? It's really not but we humans tend to over-complicate things!

The golden nugget in a Growth Plan is in Phase 4- Implementation. You can make the best, biggest, and shiniest plan but unless you implement it it's worth nothing.

So I'd like to challenge you to write your own growth plan. Work through the above 4 steps and let me know how it goes!

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You Can't Grow With Bad Numbers

I recently met with a prospect that was interested in growing her business (super exciting stuff... my favorite prospects to meet with!). Her energy was contagious and I could tell she had a passion for what she was doing. It made me even more interested in how I could help her achieve her goals. Our conversation started off with her talking about her business- what service she provides, her customer demographics, the values her business holds, and where she wants to be in the next year or so.

Great! She had that info down and rattled off answers to all of my questions.

It was downhill from there.

The conversation continued with "Okay, this is where you want to be. Where are you now?"

Her response was "Well... I'm not real sure what our sales are. Nope, not real sure what my gross profit is. Ugh, no idea how much my monthly payroll runs."

What?!? I followed that up with, "How would we monitor your growth if we don't know your numbers?"

Crickets.

What I went on to explain to her was that it is impossible to do financial coaching or growth planning without accurate numbers. Accounting can be overwhelming and intimidating but numbers are concrete. They provide a map to your growth (positive or negative). They allow us to monitor progress, make adjustments to your strategies, and keep growing.

So at the end of the day you can have the best action plan and strategies, but without the ability to rely on your numbers you won't be able to measure whether you're going to reach your long-term goals or not. You need to be able to tell whether your plans are really working, or if you should change tactics to reach your goals.

If you've been relying on bad numbers, or NO numbers at all you should consider outsourcing your accounting to an expert. Let's setup a time to chat and see how we can help you GROW your business.

Are You Using the "Economy" Excuse in Business?

If I had a dollar for every time someone blamed their business results on the economy... I would probably have a couple hundred bucks. Have you ever used any of these excuses when discussing why your business isn't where you want it to be?

-  "People just aren't spending money." -  "Consumers want the cheapest price." -  "I just can't compete with my competitors pricing."

Well if you've said "People aren't sending money" then you've never been to the mall, the movies, or tried to eat out on the weekend. Otherwise you would know people are spending money! Lots of it. They may not be spending it with you, but they're spending it.

And if you've used either of the other two excuses then you have a different problem. You're either targeting the wrong customers OR you're not delivering enough value.

The {Right} customers will pay for value and if you aren't delivering it to them someone else will.

If growing your business is something you've struggled with it may be time to bring in outside help (and lucky for you that's what we do). A consultant can help you identify problem areas, brainstorm solutions, set goals, hold you accountable, and so much more.

Because... People Are Spending Money.