The 4 Ways To Grow Your Business

//The 4 Ways To Grow Your Business

The 4 Ways To Grow Your Business

Here at Mackey Advisors we have a “4 ways to grow your business” tool.  In a recent client coaching session, while using this tool, we arrived at 52 different strategies to grow the business.  After considering the complexity and time to market, we determined there are 3 strategies that could be implemented immediately.  Just those 3 are on track to produce $160,000 of new revenue, with no additional cost.  So, we’ll be adding $160,000 to the bottom line immediately!  And we still have 49 strategies to go.

Every time we do this work we are blown away by the results.

To help you kick start your own growth plan, here are the 4 fundamental ways to grow your business:

  1. Increase the number of customers within your niche market
  2. Increase the transaction frequency
  3. Increase the transaction value or “average sale”
  4. Increase the effectiveness of each process in your business

If you’re at all skeptical about whether there really are just 4 ways (obviously with multitudes of strategies under each) think of a strategy to grow your business – any strategy – and you’ll find it very probably falls under one of these 4 areas.

  1. Increase the number of customers within your niche market

If you’re like most business owners your primary focus will be on the first way to grow your business – winning new customers. You may have often thought “I need more leads’, “I’ve got to get more inquiries”, “If I could just get the phone to ring and more people to walk through the door we’d be doing really well” and so you invest heavily in marketing.

Focusing on this way to grow your business is often far more expensive and the least leveraged. It costs 5 times more to attract a new customer than it does to retain an existing one. That doesn’t mean you don’t want to get new customers.  Just make sure you have active strategies for the 3 additional ways to grow your business as well.

  1. Increase the transaction frequency

Increasing the “transaction frequency” – or the number of times someone buys from you is an important step to increasing your profitability.  Find out where you are now by simply dividing your number of purchases in a year by your number of customers.  What can you offer to bring them in more? Ideas to consider here are:

  • Ensure your existing customers know about all your offerings
  • Loyalty programs or package deals
  • Special offers
  1. Increase the transaction value, or “average sale”

This is a “Blinding Flash of the Obvious” or “BFO”!  Indeed, it’s obvious, but do you have a clear strategy to make it happen?

There are two fundamental ways to increase the average sale. First, by cross selling or up-selling, both mean you encourage the customer to buy more.  Most current customers would rather buy from you, someone they know and trust, than find a new vendor.

The second way to increase the average sale is to raise your prices.  This can be a scary proposition.  If it has been a while since you benchmarked your prices against your competition, start there.  I am often surprised how often small business owners leave revenue on the table for fear of increasing prices.  Do your homework before acting! But don’t walk away in fear before considering this option.

When it comes to either increasing the transaction frequency or the average sale to your existing customers as a way to grow, consider this:

  • The probability of selling to an existing customer is 60-70% compared to 5-20% for a new prospect.
  • Current customers are 50% more likely to try new products and spend 31% more when they do compared to new customers.

Wow, now we are talking leverage. Staggering isn’t it?

  1. Increase the effectiveness of each process in your business

Increasing the effectiveness of the way you do business is central to everything, but few people work at it.

When you think about it, a business is nothing more than a group of people carrying out a variety of processes – the quality of the processes defines and determines the quality of the outcomes. Makes sense doesn’t it? Start by thinking about the 20% of your processes that take 80% of your energy.  Then stretch your team to find ways to keep or improve quality while reducing cost.  Don’t forget to test your ideas before making wholesale changes!

Intrigued?

If you’d like to explore how we can help you grow your business, call us at 859-331-7755 or contact Adam Reynolds at Adam@MackeyAdvisors.com for a strategy session.

 

About the Author:

Author, speaker and fearless leader of the Prosperity People, Mackey McNeill is a passionate entrepreneur dedicated to creating prosperity in the lives of her clients and within her community. She has merged over 30 years of expertise as a CPA and Personal Financial Specialist with her knowledge of internal alignment to create The Prosperity Experience: a planning program rooted in self discovery and financial self actualization. A sought after thought leader on the subjects of money and intention, Mackey has been quoted in The Wall Street Journal, The New York Times, TIME, Money, USA TODAY, Mint.com and Reader’s Digest, along with many other publications.

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