How To Grow Your Business

Building a successful business doesn’t happen by accident. Ask anyone who’s successful in business. They have all worked - hard and consistently.
You see, business is not about opening the doors and sitting back to reap the rewards. It is about building machines that work, and keep on working, to give you what you want in life.
Compare it to a car. You have a car to get you from where you are to where you want to go. But you have to put petrol in it. You have to service it, repair it and look after it so that it will keep you on the road to where you’re going.
The same applies to business.
You have to keep putting in new ideas - or keep on working the ones that work for you. You have to keep looking at the results, adapting them to the changing business climate and looking after the business (and your customers) to make sure that it stays on track to get you where you want to go.
Having said that - you might think that it sounds awfully hard.
Not at all. Growing a business can be easy.
In fact, there are only 4 ways to do it. That’s right - 4! And all you need to know is what they are and what to do with each to grow yours.
Knowing the right things to do in any one of the areas will give you significant growth and increases in profits.
Knowing what to do in all four will catapult your business to incredible levels of success. Here’s how.
Firstly, let’s look at the 4 growth areas. To grow your business you need to:-
Increase the number of customers (of the type you want) that you have
Increase the amount of money they spend with you each time they buy
Increase the number of times that they buy from you
Operate your business more efficiently by maximising the effectiveness of every process (systemising) – and Best Practice is just perfect for that.

Marketing systems encompass the first three growth areas, however the fourth is also extremely important and will lead you to efficiencies that will allow you get your product or service to the market with less cost.
Everything you do in your business is a process - writing a letter, answering the telephone, making a sale, serving your customers, marketing - the list goes on.
You need to make sure that everything you do is done in the best possible and most effective way every time so that you can get the best results.

A word about expenses

Unfortunately, when posed with the question of how to make more profit, most businesses spend far too much time looking at how they can cut expenses to the bone.
But, if the truth is known, it’s probably fair to say that your business is already operating to minimums, isn’t it?
This area is also the one with least potential so, apart from being wise with your money, don’t look at cutting expenses as the way of making more money. Even by cutting expenses to the bone, there is only a finite amount of additional money to be made.
Growing your business
There is, however, an infinite amount of growth you can achieve by doing better in all of the other areas of your business. There’s really no limit to the amount of increase a business can achieve!
Let’s look at an example of just how easy it is to achieve a significant increase in turnover.
Let’s imagine that you own a small business - it could be any type of business - and that we’ve had a look at the growth areas above and found out what is currently happening - that is the numbers that apply to you.
Let’s say that we’ve measured the number of customers that you have and we’ve found out that you have about 2000 customers.
We’ve also measured the amount they spend with us each time they come in and we’ve ascertained that, on average, each customer spends around $10.00.
We’ve also done some research on the number of times each customer comes into the business and purchases, and that might be personally or on the telephone. The average for is 10 times per year.

Number of Customers	2000
Average dollar sale	10
Number of times they buy	10

The turnover for this hypothetical business would be $200,000 per year. Possibly not a bad little business, depending on the type, of course.
How would you feel, as the owner, if you could lift that turnover by 10%. Fairly happy? Probably.
Let me show you how.
Imagine, with some clever marketing strategies, some ads that got better responses or some great referrals, we could lift the number of customers by a small amount to 2,200 - a 10% increase.
Think, too, that with some special add on sales, merchandising or offers we could get the customers to spend $11.00 rather than $10.00 when they come in - again a 10% increase.
Lastly, with some clever enticements, maybe with a special closed door sale or some clever promotions, let’s assume that we could bring each customer back just 1 more time a year to the business to buy - 10% again.
What have we just done? Achieved a 10% growth in our business? No!

	Current		New
Number of Customers	2000	+ 10%	2200
Average dollar sale	10	+ 10%	11
Number of times they buy	10	+ 10%	11
Turnover	200,000		266,200

That’s an incredible 33% increase in turnover - and probably more in profit - just by applying small increases in the 3 key areas. That’s the beauty of compounding!
What effect, then, would a 20% increase have in each area. Do the numbers. A 20% increase would result in a turnover of $345,600. A staggering 72% increase!
A 30% increase in each of the 3 keys areas would give us nearly 120% increase in our turnover!
The great news is - it’s not that hard.

A word about measurement

But first, you need to know the numbers! If you don’t know what the numbers are that apply to your business, how can you possibly know what you have to achieve to get the increases you need? Or whether or not you are achieving them.
Let’s spend a moment thinking about your business. If you were asked - right now - what these numbers are for you, would you know?

Let’s get started!

So, how do the numbers stack up for your business? More specifically, what would a little concerted marketing effort on your business achieve for you?
Let’s do the numbers. Here’s how.
The first thing you need to measure is the number of customers you have. This is probably the trickiest one to get right, especially if you’re in a business that makes a lot of repeat sales, like a newsagent.
Sales is not what you should measure, it’s actual customers that buy. Some businesses will find this fairly easy to do. For others is will be a bit tricky - so get smart about this.
If this could be a problem for you, then the best thing to do is to inform your customers that you are doing some research for the business, and ask each whether they have previously been into the store in that week.
If you keep accounts for customers, like you probably would in a wholesale or manufacturing company, then this should be a relatively easy figure for you to get - but don’t forget to include your cash customers as well.
You only need to measure this statistic for a short period of time, long enough to get an accurate reading. Try measuring it for two weeks or a month. Unless you get wild fluctuation in the results, it’s probably safe to take an average of the totals.
Next, you need to measure the amount of money they spend with you on each sale. The easiest way to do this in a retail environment is to take a total of the amount of sales (not customers) for the week - perhaps from your cash register roll) and divide it by the number of sales for the week. This will give you your average dollar sale - or the amount each customer, on average - spends with you each time they buy.
For other businesses, the measurement process is usually easy and can be obtained from invoice number and totals. Use the averaging method and divide the total of the invoiced sales by the total number of invoices issued.
Lastly, you will need to measure how many times - on average - each customer buys from you. If you have a computerised accounting system, again this should not be too hard.
If you find this too hard because of lack of records, then hazard a guess, but make it as accurate as possible and try to back it with some proof.
Now is the time for you to put in place your plan for measuring what is happening in your business. Go to the Business Growth Worksheet - and plan how you are going to measure the key areas.
Make a commitment to commence and finish this measurement phase by a certain date.
Then start to measure. And don’t go any further until you have!
Once you have established the numbers, go back to your worksheet. Here’s where we start to build a picture of the current situation with your business and just how much potential lies in it.
Transfer the figures from your measurement studies to each of the key growth areas lines on the worksheet. Calculate the turnover. If you’re out wildly then obviously you need to have another look at the individual amounts to see where you’ve gone wrong.
When you have the numbers right, do the exercise for 10%, 20% and 30% increases in each of the key areas. Are you impressed?
Play with applying difference increases in each area in the “hypotheticals” area of the worksheet.. Compare the results each gives you.
The final set of workings is for your “dream”. Put your desired outcome at the bottom and the percentage increases needed to achieve it on each of the three lines.
Now copy that page and put it in a prominent place in your business office. If you work from home, put in on your refrigerator or somewhere where you will see it daily. Why?
Because this is to be your goal. And everyday you should see it. Month by month, as you measure what you implement from this program you’re going to get closer and closer to that magic figure.
Do it! It’s an integral part of the success of this program.