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Scale Your Small Business: 5 Key Growth Strategies

What Does Growth Mean to You?

When you say that you want to grow your business what exactly do you mean? Most of us assume when we say growth we mean revenue growth, so let’s assume for a minute that you want to grow your revenues and profit. Many business owners focus on getting more clients to grow revenue, but is that always the most effective strategy? What is the best growth strategy for YOUR business?

Here are 5 effective growth strategies for your business:

ONE:

Grow your client base. This is the obvious one. If you want to grow your revenues, you can sell more stuff (or more services) to more people. Whether or not this is the best growth strategy for your business depends on a few things.

First, do you have capacity? In other words, if you get more clients or customers, are you able to serve them? Or if you don’t currently have capacity, can you easily grow it to meet demand? Will you have to invest in new equipment, new people, additional resources?

Another question to ask yourself is what does it cost to acquire a new client? How efficient is your marketing and sales process? If acquiring a new client is very expensive, then this will cut into your profit margins.

Here’s an extreme example. The restaurant chain Red Lobster is currently considering filing for bankruptcy after their “Ultimate Endless Shrimp” deal brought in so many customers who ordered unlimited shrimp that the chain lost $12.5 million in one quarter. The promo worked to bring in more customers, but the cost of those customers turned out to be higher than the revenues they added. Increased revenue does not always lead to increased profits if the cost of acquiring that revenue is too high.

However, if you

  • have the capacity to serve more clients
  • know exactly who you are marketing to
  • can reach them very efficiently and cost effectively
  • have a message that is highly effective at bringing in your ideal clients

then growing your client base is a great way to grow your revenues profitably.

TWO:

Sell more to your existing client or customer base. This is a growth strategy that is often overlooked. It is easier and more profitable to sell more to your existing clients than to acquire new ones. Especially if you already have more products or services that they can purchase from you, marketing those additional offerings to your existing clients is much less expensive and often more efficient and effective than marketing to get new clients.

Presumably you have happy clients who already know you, like or even love you, and trust you. In this case, you can easily reach them through emails or even phone calls. You can inform them of additional products or services that are available or offer upgraded packages or bundles.

Another way to sell more to existing clients is to try to increase the frequency of their purchases. What incentives can you give them to come back sooner? Sometimes just staying top of mind will increase how often they buy from you.

 

THREE:

Add new products or services to your offerings. Another way to increase your revenues is to expand what you offer. Expanding your product or service mix can both bring in new clients and increase what your existing clients are spending with you. This growth strategy carries both risks and significant potential benefits.

On the risk side, it has the same risks mentioned above when we talked about growing your client base. If you are going to add a new product or service, you must evaluate if you have the resources and the capacity to do so. Another risk: if you invest time and resources in developing a new offering, and the offering doesn’t sell or doesn’t meet expectations, this could be a loss for your business.

On the benefit side, if you are very tuned into your client base and what they want and need, the opportunity to create something that they will be excited to purchase from you is real. We highly recommend using the Wish List Interview technique (Chapter 8 of The Pumpkin Plan) to identify gaps in your industry that you can fill. You can then use the Insider Strategy (Chapter 9 of The Pumpkin Plan) to develop your new product or service with input from your clients. By the time it is ready to roll, you will have an audience chomping at the bit to buy your new offering!

FOUR:

Raise your prices. Many small business owners are quick to discount their prices in order to attract new clients or even to keep existing ones. But while discounting may increase the size of your client base, your sales would need to increase significantly in order to recover your profits.

At the same time, small businesses are hesitant to raise their prices because they are afraid they will lose clients. But this growth strategy is well worth considering. If you do the calculations, you will see that because you are increasing your profit margins when you raise your prices, you can afford to lose some clients without sacrificing your profits. Often, you can shrink your client base and still increase your profits.

If you are already at or close to capacity, this is a great way to grow your income without having to work more hours, add team members, or invest in additional resources. Businesses that are clear on what makes them unique will stand out from their competition. If you look different in a way that your clients care about, then your clients will recognize the added value and be willing to pay a premium for it.

 

FIVE:

Leverage your time. This growth strategy is particularly salient for service providers such as coaches, consultants, accountants, bookkeepers, and others whose profitability depends on serving clients both efficiently and effectively. There are a few ways to leverage your time.

One strategy that we strongly recommend: if you are charging your clients by the hour, stop doing that!

If you are charging by the hour, your growth is limited to how many hours you can work. Charging by the hour also opens you up to a lot of client headaches, as they will judge you on the value of your time and not the value of the service you deliver. They might question the number of hours that you worked. If you charge by the hour, any efficiencies that you develop in your service delivery will only benefit your client, and you will actually lose income.

On the other hand, if you charge a fixed fee, or package price, and they are not purchasing a package of hours but rather a package based on:

  • the work you are doing for them
  • the deliverables that you promise and
  • the results that they are getting

then your business will benefit from any efficiencies that you develop.

For example, if you specialize in working with a specific type of client, any processes or solutions that you develop can apply to all or most of your clients. You will not be reinventing the wheel with each client, making the work that you do for them highly effective because of your expertise and less time intensive for you.

Another way to leverage your time is a one to many model. Many coaches and consultants create mastermind or peer groups of their clients, where they teach and facilitate group discussions.

When your clients have similar issues to each other, this is a very effective model for getting results in a very time efficient manner. You can serve more clients without working more hours. This model often further benefits your clients as they receive the support and knowledge of their peers as well.

If you are an entrepreneur and want to hire someone who can help you design your winning growth strategy, you can GO HERE to Hire a Pumpkin Plan Strategist.

If you are a business coach or consultant, and you want to know how to develop your own winning growth strategy, we invite you to become a Certified Pumpkin Plan Strategist.