Profitology

Author: Melissa Archer

  • How a Win-Win Offer Can Help You Close Sales

    How a Win-Win Offer Can Help You Close Sales

    A successful sale happens when a buyer and a seller agree to the terms of the offer.

    When crafting an offer, majority of small business owners make one of these two common mistakes:

      • They offer their goods or services at very low prices.
      • They make a sales offer that does not encourage future negotiation.

    There’s a third extremely effective sales technique that hardly anyone uses.

    A method that satisfies your customer’s desire for quality products or services while also persuading them to agree with your best price. How is this possible?

    Crafting an Irresistible Offer to Attract Sales

    By foresight, observation and practice, you can create an offer that delights everyone involved. It’s not a painless or effortless process but it’s very doable. Perhaps the easiest way to show it is through an example…

    Recently I met with a client who told me about an offer from one of his suppliers who was trying to win their loyalty.

    The offer consisted an arrangement whereby if my client used the vendor as their sole solution provider, they would give a 5-year warranty on their product and decrease the sales price.

    This means that my client would be able to offer a solution to their customers with the added value of increased warranty. Further, since my client can enjoy a decrease in the cost of sale, his gross margin will increase for this particular sale.

    This is an example of a Win, Win, Win for all parties involved. See how the supplier remarkably reconciled the varying needs and demands of all parties involved?

    The supplier gains the sale of all product items, my client the increased gross margin, and the end customer, a longer period of warranty.

    Such is the power of a win-win offer.

    So always be asking, ‘how can I create a marketing offer that leads to a beneficial outcome for all parties involved?’

  • An Important Metric Every Business Owner Needs to Track

    An Important Metric Every Business Owner Needs to Track

    One of the most common metrics many small business owners measure is turnover. They gauge the success  of their business based on the growth in turnover from year to year.

    When a peer asks how business is going, we boast that turnover has increased by X percent, or the dollar value of the turnover being reported. However, measuring revenue as an indicator of business performance is, at best, pointless.

    It fails to take into account the gross margin made on the sale. For instance, if a product or service is priced at $100 and the cost of producing it is $90, the gross margin on the sale is $10 or 10%.

    What does this mean? For every product sold, there is $10 available to pay for overhead or fixed costs such as rent, wages, and insurance. If the cost of producing the sale increases, the amount of funds available to pay for the fixed costs decreases, and hence the business net profit suffers.

    There’s another drawback to focusing solely on revenue as a metric. For instance, if the volume of sales increases, and the gross margin remains constant, the additional labour costs required to manage the increase in sales volume may lead to lower business profits.

    Increase Net Profit By Focusing on One Valuable (Yet Often Neglected) Metric

    Gross margin is a valuable indicator of a company’s survival and profitability. It is the difference between the selling price of a product or service and the cost of producing it. Instead of focusing on increasing turnover, concentrate on strategies to increase the gross margin for a more profitable outcome.

    You can start by implementing efficiencies or negotiating cheaper prices from suppliers. If you can bring down the cost of selling a product or service, you will be able to raise the gross margin.

    For example, reducing the cost of a product by $5 increases the gross margin by $5 or 15%.  This gives the business owner much better returns for his efforts than trying to increase the revenue by 50%.

    Let’s do the numbers, based on the example above:

    Sales of 5,000 items at $100 per item

    Total revenue:            $500,000

    Cost of sale per item: $90

    Total cost of sale:       $450,000

    Total fixed costs:        $45,000

    Net profit:                   $5,000

    Increase in turnover:  40%

    Sales:                           7,000

    Total revenue:             $700,000

    Cost of sale:                $630,000

    Gross Margin:             $70,000

    Total fixed costs:         $45,000

    Net profit:                    $25,000

    *This assumes there’s no extra labour costs required to generate the increase in volume of sales.

    Decrease in cost of sale:    $5

    Sales:                                   5,000

    Total revenue:                   $500,000

    Cost of sale per item:        $85

    Total cost of sales:            $425,000

    Gross Margin:                   $75,000

    Total fixed costs:               $45,000

    Net profit:                          $30,000

    This example demonstrates how focusing on increasing gross margins rather than sales volume can be a far more effective method of improving the viability of the business. A decreasing gross margin can hurt your cashflow. Adequate gross margin assures that you will still have enough money to cover the rest of your business expenses.

    Monitor your gross margin and devise strategies to increase it. While sales and profit matter, improving gross margin is equally (or even more) important to keep your business alive and thriving. It’s a metric you cannot neglect.

    So next time a peer asks about your turnover, try to steer the conversation to a much more realistic metric: gross margin.

  • Why Cash is King, and How Every Business Owner Can Manage It Better

    Why Cash is King, and How Every Business Owner Can Manage It Better

    You’ve heard the saying “cash is king”, and as a business owner you can attest to that from your own experience running a company.

    Receiving payment for a sale of your products and services is not difficult. The real problem is when. If only you can collect payments instantly after you have made the sale, you would worry less about cash flow.

    However, this is not the case in actual practice. Sometimes you get paid 15 or 30 days after you deliver a product or a service. The worst customers even delay the payment for 90 days.With this set-up, a few businesses may appear to be making unimaginable profits yet in reality, they are suffering from poor cash flow.

    With this set-up, a business may be making unimaginable profits yet in reality, they are suffering from poor cash flow.

    How can a business have profits yet experience poor cash flow?

    Quite simply, the profit or loss of a business is calculated as the total income minus expenses.

    The income is recorded at the time the invoice is generated. Expenses are documented when they are incurred, regardless of whether they have been paid. A profitable business may have a negative cash flow if there are high accounts receivables (customers owing you money) and large inventory levels on hand waiting to be sold.

    Besides these, tight supplier payment terms and the requirement to service debt greatly affect cash flow. Under these conditions, a profitable business will suffer severely from cash flow constraints.

    For growing businesses, the strain on cash flow is amplified. Consider that you have attracted many new clients, and as a result, your revenue has doubled. The increase in sales would be putting further pressure on cash flow due to the additional costs incurred in labour and inventory to make that sale. The delays in receiving payment for the sales will further worsen the cash flow problem.

    There’s a term for this – Growing Broke

    For most small business owners owners, growth is a common goal. However, rapid growth can create volatility and hinder cash flow in unpredictable ways.

    When a business grows too rapidly, you risk compromising the quality of the product or service you provide. Workers are forced to cut corners to meet production demands. In the process, they make more mistakes because they are pressured to work faster to keep up with a higher sales target.

    For example, you want to raise the sales volume of a particular product or service. Workers need great attention to detail to maintain a certain standard of quality. With your current staff, your can generate 100 pieces of a certain product on average but if you push for a higher sales volume, say to 1,000, you cannot guarantee that they will be done with the same level of excellence.

    What measures can you take to control your cash flow?

    Here are a few proven tips to smooth out your small business cash flow:

    1. Put a system in place to measure and predict the cash position of the business on a weekly basis. This is one of the most overlooked parts of managing a business. Make educated cash projections based on the financial data you have accurately gathered.
    2. Plan for anticipated cash shortages. Contact your bank early for a line of credit or overdraft facilities before a crisis strikes.
    3. Negotiate longer payable terms with suppliers. If you have been a good client to them, they will be willing to extend the terms. They have a vested interest in keeping you in business.
    4. Review the profit and loss for those unnecessary expenses that can be reduced or removed. You’d be surprised that there are tons of ways you can cut costs and run your business as lean as possible.
    5. Implement strict accounts receivable policies. Most businesses have upfront payment collection and impose cash on delivery to slow-paying customers.
    6. Invoice regularly and offer multiple ways to make it easy for customers to pay. Timely invoicing and simplifying payment will pay off.

    Is your business growing broke? If not, this is the best time to implement these changes in your cash flow management. And if you need assistance, seek a trusted accountant or a business advisor to help you handle your cash flow challenges and plan wisely for the next few weeks, months, or even years.

  • How You Can Win Business With Persistence

    How You Can Win Business With Persistence

    Those of us with kids, or who are often surrounded by children, can nod knowingly at this all-too-common conversation:

    Child: Can I invite some friends over?

    Me: What friends? You don’t have those.

    Of course, I was just jesting at the last part. Kidding aside, if you have spent a considerable amount of time around small children, you have seen their sheer tenacity when they want something. They will repeatedly ask for it and won’t stop until they get it.

    My children’s favourite at the moment is asking if a friend can come over. So I am asked this question on a daily basis. One morning, they have even woken me up asking for the same thing.

    It’s frustrating to say the least. Usually my response is to either give in or snap and put my foot down. And regardless of my answer that day, I can guarantee you, they’ll be back asking the same question the next day. They persist until they get the answer that they want.

    When Persistence Wanes

    As we get older, we stop badgering people even if we want something so much.

    We learn that repeatedly asking for the same thing frustrates others. And if we keep doing so, people avoid or reprimand us. Through time, we instinctively learn that’s it’s polite and adult-like to patiently sit back, wait and hope for our wishes to be fulfilled.

    But if you think about it, which behaviour gets the most favourable outcome? By favourable, I mean, a result that we want to achieve. Passively waiting and silently sulking? Or actively pursuing our goals, dreams and visions through persistence and persuasion?

    Persevering like a child more often than not leads to getting what we want.. ‘Giving up’ has not rewarded anyone. Success certainly doesn’t just fall on our lap – we need to actively seek it and work for it.

    Persistence Leads to Success

    Your first call to a client may never convince him to buy. But a series of calls and meetings that build your company’s reputation and win the client’s confidence might lead to a sale. That’s how persistence pays off.

    In business, you often have aspirations and goals you’ve always wanted to accomplish. If you take a lesson from the tenacious child, you can learn that regular prodding, asking, prompting will help you get where you want to be. And it’s much quicker than if you just sit back and hope that an opportunity will present itself to you.

    So if you’ve got a target, take the bull by the horns – make that phone call, send an email, knock on the door. Don’t give up until you get the answer you are looking for. Majority of your competition will stop at the first rejection but if you persist, you’ll be an exception. That’s how you’ll win with persistence. Try it and see the difference.

  • Is Your Business Going Insane? Get Help.

    Is Your Business Going Insane? Get Help.

    Albert Einstein defined insanity as the act of doing the same thing over and over again and expecting different results. Sanity is the opposite of that –  it means changing how you used to do something (because it’s not producing the result you want) so you can hope for a favourable (or better) outcome.

    This act oddly scares people because the outcome is uncertain. They would rather keep doing things the same way because they know it leads to a predictable result.

    Yet it doesn’t take a genius scientist to realise that calculated risk-taking and innovation are the keys to achieving your personal or business goals.

    Fear of Imagined Failure is the Enemy of Change

    Small business owners constantly repeat the same year over and over again. I have witnessed this first hand.

    When meeting them to discuss their year-end figures, we have similar discussions regarding their profits and areas to focus on to improve their business.

    Frustratingly, even after exploring suggestions, options and opportunities for growth and expansion, I am met with excuses and reasons as to why the recommended changes won’t work.

    Defeat False Fear With Courage

    A business cannot succeed if the owners are not prepared to make changes and take risks to move it forward. Not taking a leap of faith sets up anyone for a slow decline or constant struggle for survival, which is worse than failure.

    Risk-taking does not mean acting without thinking. You need to gather sufficient information so you can make a careful decision and take calculated risks.

    It seems like the fear of (imagined) failure is what holds us back. However, you know that repeatedly re-experiencing failure in advance is a waste of time and brainpower.  You can overcome this unnecessary anxiety by taking risks that you can afford. For example, you can:

    • Set up a meeting with a new prospect
    • Network with potential leads
    • Review your marketing strategies to sell more to your existing customers

    If you don’t succeed at these attempts, the cost of trying is low. If you do succeed, however, the rewards can be great. The more you take risks, the sharper and more confident you will become.

    Don’t be afraid to keep experimenting until you find the proven processes and practices that lead to repeated success. You need wisdom, labour and courage to run a business well – but above all, you need courage to succeed.

  • Why Do We Put More Effort into Planning our Holidays than our Businesses?

    Why Do We Put More Effort into Planning our Holidays than our Businesses?

    It’s funny how when I ask business owners where they are going on holiday, their response is so certain.

    Their vacation is all planned out, day by day. They have usually decided which sights and attractions they will visit; how many days they are staying in each location; even the time of their flights.

    You probably do the same when planning for your holidays. You research the best hotels, airlines, and time of the year to travel to your dream destination. Like most savvy vacationers, you usually compare prices and plan your budget accordingly.

    Often, you’ll engage the services of a travel agent to assist you with these tasks. You know that you can benefit from their experience and insider knowledge. You also feel comfortable knowing that if something goes wrong, you have someone to help you sort out flight problems or accommodation mix-ups.

    So, why is it, as business owners, we don’t plan where we want our business to be in one, five or 10 years time? Isn’t the livelihood of our business more important than the two-week holiday we take once a year? Doesn’t our ability to take regular holidays depend on the continued success of our business?

    Plan Where to Take Your Business in 10 Years

    Look into the future and imagine where you want to see your company in one, five, and ten years. Do you see a clear picture? Does it look promising?

    If it’s vague and uncertain, set aside some time to determine where you want your business to be in 10 years time.

    Choosing your goals well can help point your company to the right direction. Your mission is a good starting point when setting goals and objectives to tackle over the next decade. Then break it down to 5-year and one-year goals, all working towards the achievement of your 10-year plan.

    From there you can plan what you need to do on a month by month, week by week basis to achieve the goals you have set for your business.

    Getting Started with Your 10-Year Plan

    Like engaging a travel agent to plan your holiday, why not invest in a business coach or mentor to assist you in setting and achieving your short- and long-term goals?

    A business mentor is an invaluable resource you can turn to when you come across challenges or need encouragement in difficult times. They can provide indispensable guidance, advice, and solutions that will lead you to the path to success.

    Working with an incredible mentor can help bring clarity and strength to your vision. You will also accomplish more things much quicker than you would be able to do on your own.

    So, tell us, what’s stopping you from fulfilling the great vision you have for your business?

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  • Simple but Powerful Business lessons from a Nine-Year-Old Entrepreneur

    Simple but Powerful Business lessons from a Nine-Year-Old Entrepreneur

    In making an idea work or in running a small business, age matters little.

    You’ve probably heard of successful teenpreneurs and kidpreneurs making serious amount of money from their own small businesses.

    It’s no secret that smart, enthusiastic, and business-minded kids do exist.  Remember your classmate back in grade school who  made a profit with his lemon stand business? His parents must have groomed him to be enterprising or he just has an entrepreneurial inclination from an early age.

    A friend of mine, for instance, has a nine-year old daughter who has started a money-making venture doing hand and foot massages for family and friends at 25c a pop. I was surprised to learn a couple months later that she has kept at it and made a reasonable amount of money in doing so.

    4 Business Strategies Taught by a 9-Year-Old Entrepreneur

    As amusing and trivial as this “business” sounds, she has instinctively implemented sound business strategies that we can all learn from.

    1. Consistently create value for your customers

    Does the level of service or quality of goods you provide satisfy your customers? The nine-year old kidpreneur provides consistency in her product, creating value for money that her customers keep coming back for.

    1. Serve a specific, well-defined market.

    Are you trying to serve as many markets as possible? Do you worry that you might miss a great opportunity if you turn a job at which you don’t excel at? Then you can learn from this kid. Her target market is clearly defined: family and friends who need a good foot and hand massage. She has developed a service that her target customers seek.

    1.  Understand that ‘cash’ is king.

    Do you encourage your customers to pay you as quickly as possible? If not, it’s time to set up prompt fees collection to improve your cashflow. Learn from this clever, young masseuse. She’s taking upfront payment for her service, thus ensuring she is not out of pocket. If she had any expenses, cash flow would be of little concern to her.

    1. Holidays are a terrific time to offer special promotions.

    Do you grab your customer’s’ attention with holiday-inspired sales and marketing promotions? Think outside the box so you can find creative ways to reward your loyal clients and win new customers. This little girl can teach you how to give discounts based on current events. For example, she offered a two for the price of one as an ANZAC day special.

    How can you apply these lessons in your own business?

     

  • Why Every Business Needs a Contingency Plan

    Why Every Business Needs a Contingency Plan

    At the beginning of the year, our team sat down together to discuss our goals and plans for the next 12 months. This included systems and plans that we want to implement this year to improve efficiencies and consistencies in how we do things.

    One of the suggestions put forward by my team was to create a “Mel contingency plan.”

    Is there a continuity plan for your company in case of your long absence?

    We had to think through and document the tasks and processes that I, as a business owner, routinely carry out so that should something happen to me, someone else can step up and fill my shoes.

    Preparing for eventualities goes further than filling my roles such as meeting with clients, overseeing staff, and managing workflow. They had to be aware of the critical aspects of our business operation, such as:

    • where our business comes from;
    • what key functions need to be filled when I’m not around; and,
    • what resources are required to continue the business.

    Plans have to be put in place to ensure wages and suppliers are paid on time, regulations of professional bodies are adhered to, and new prospects are being acted upon.

    The Bright Side of Preparing for Twists, Turns or Unexpected Changes

    This may sound doom and gloom, yet having a contingency plan would give me, the leadership team, and my family peace of mind in the event I get “hit by a bus”.

    As a business owner, I see also this as a remarkable opportunity to review and improve our systems and processes.

    It’s also a great time to appoint or empower key employees in my company by sharing with them crucial business knowledge and processes.

    With this solid plan, I am giving myself freedom to go on an extended holiday knowing that the business can operate without me.

    What greater satisfaction could there be than knowing your business will still run smoothly even if you’re not around?

    Have you ever worried about how your company would do without you? If so, what have you done about it?

  • A Tale of a Customer Service Blunder that Will Leave You Shaking Your Head

    A Tale of a Customer Service Blunder that Will Leave You Shaking Your Head

    Here’s a true story involving a broken glass door, a tradesman, and two disappointed customers.

    Recently, an unfortunate incident happened at home. Our glass sliding door broke, an apparent safety and security hazard which required immediate attention.

    We called up a glass company at once. One promptly answered and gave us the option of having the door fixed the same day for a higher price than the next day.

    Having kids around, we thought it best to get the shattered glass removed and the broken door mended right away. The risks obviously outweighed the cost savings. We were willing to pay more for the safest, quickest solution.

    In came the repair man wearing a frown

    When the handyman showed up at our doorstep, he made no effort to smile or conceal his furrowed brows and tightened lips. That was how he made his first impression on us.

    From his facial expression and behaviour, I gathered that he was not keen to be installing a glass door on the start of a weekend. Being a last minute call out, on a Friday, he probably preferred to relax with his family or hang out with his friends rather than fix a stranger’s door.

    I knew that the frustration was not directed at us, but at his employer, who “must have left it to the last minute to assign him the job on a call out, rather than scheduling someone earlier in the day.” Given the short notice of the job, it was possibly the earliest anyone could accommodate our request to replace the door.

    But his mood and attitude while on the job certainly left us feeling uncomfortable.

    The Real Cost of Bad Customer Service

    Whether out of frustration or lack of diligence, this employee did not bother to ensure the timely payment of the urgent work.

    When we refused to give our credit card details for him to take back to his office, he nonchalantly left stating it was his boss’s problem and they could deal with it on Monday.

    What does this mean?

    Every contact that a customer has with one of your employees is a reflection of your business.

    Whether they be a delivery driver, a sales person, a tradesman, or an administration assistant, all dealings influence the image of the business.

    First, it is important that all employees are trained in the importance of customer service. Sure, I wouldn’t have necessarily been thrilled to be called out at 5:30pm on a Friday afternoon, but I can guarantee that there is no way my customer would detect a hint of my frustration or unhappiness.

    Second, in this modern age, tradesmen have no excuse for not accepting payment for jobs offsite. There are various forms of technology available, be it apps on phones, portable eftpos machines, even the provision of bank account details so an Internet transfer can be made.

    The time delay in receiving the payment has an effect on the cash flow of the business. If this happened to us, how many other customers were allowed a delayed timeframe for payment?

    The administration staff would then need to take the time out of their day to follow up on payment. If they have to leave messages and follow up a number of times, this will further defer settlement.

    Since the urgency of the job has diminished significantly – we are no longer concerned about the broken door leaving our house unsafe, open to bad weather, and potential intruders because it has been fixed – we may not feel as much obliged or grateful to pay for the work carried out at a short notice.

    The Moral of the Story

    The importance of having loyal, dedicated staff who understand the contribution they make to the success of your business cannot be stressed enough. How can you achieve this?

    • Taking the time to educate employees on the importance of customer relations is a good start.
    • Ensuring that your employees feel valued and respected for their contributions goes a long way to help them feel they are a part of your team.
    • A simple ‘thank you’ in recognition of a job well done shows appreciation and gains their loyalty and commitment.

    How do your employees measure up? Will you have a different customer service story to tell?

     

  • When Saying ‘No’ Means Saying ‘Yes’ to Success

    When Saying ‘No’ Means Saying ‘Yes’ to Success

    Many entrepreneurs are so eager to do business they agree to all opportunities. This is usually the case for every small business owner trying to win customers to survive.

    You’ve probably heard the saying: “say yes, and figure out how to do it later.”

    While this may be true in some cases, it gets a bit tricky when the customer’s request is not part of your core business. Should you grant a client’s wish even if it meant disregarding your mission and values as a company?

    Keeping customers happy may be a quick way to grow your business and make more money. Yet look a little closer and it becomes clear this business strategy is unsustainable.

    For instance, working on projects outside your scope of expertise may cost your business enormous time, money, or energy. Your profitability decreases because you spend more resources to complete the task.

    There has to be an alternative business model to saying “yes” to every opportunity that comes your way.

    The Power of Saying No

    One of the most important attributes you need to have when running a small business is the ability to say no.

    In fact, Steve Jobs often asked his design chief, Jony Ives, “How many times did you say ‘no’ today?” Saying no means you can focus your time and effort on the things you love to do – the things at which you excel at.

    Saying no means you are saying yes to yourself, your family, your friends.

    Think about how many times you have said ‘yes’ to a project and had to give up doing something you love to get done.

    Sometimes the best answer is ‘no’ when:

    • you do not have enough resources to handle the requirements of a project;
    • the prospect is not the right fit for the products or services you offer;
    • the expectations, demands or requirements are unrealistic or ridiculous;
    • the request or project is a step back, i.e. it doesn’t bring you closer to your ultimate goal.

    Deciding Whether to Say No

    If you’re not sure whether to respond ‘yes’ or ‘no’ to a request, ask yourself the following questions:

    • How will doing this affect my balance at work and home?
    • Do I have a bad feeling in the pit of my stomach when I think about saying yes?
    • Will I be annoyed at myself for saying yes instead of no?
    • Does it appeal to me?
    • Practice saying ‘no’ as often and as deliberately as you can. Mastering this skill will immensely improve your satisfaction and success as a business owner.
  • What Babies Can Teach Us About Business Success

    What Babies Can Teach Us About Business Success

    Lately, I’ve been fascinated watching my daughter, Isabelle, grow from a baby into a toddler.

    On many occasions, I’ve observed her squint her eyes, steady her body, and push her chubby little legs – onward. Gazing toward me, she would stagger forward, fall repeatedly, and get back up again – eager to continue walking until she has mastered the technique.

    I’ve witnessed her struggles and admired her perseverance.

    What are Babies Trying to Tell Us?

    We have no idea what babies are thinking as they develop into toddlers.

    Where do they get such will and eagerness to keep trying despite stumbling and falling so many times?

    All I can imagine is that they must have no concept or fear of failure. Why? They probably see no reason why they should not succeed.

    To add to their chances of success is our constant stream of enthusiastic encouragement and excited cheers as they progress from moving around holding to furniture to taking that tentative first step to finding their balance through continued practice, and finally walking confidently across the room and around the house.

    Like most supportive parents, you were there when your babies tottered and toddled. Whenever they fell down, you stood there smiling, encouraging them to give it another try. If you believe they can do it, then why shouldn’t they?

    How does this relate to business?

    It’s not unusual for a small business owner to suffer setbacks. It’s how you handle those obstacles that sets you apart from your competitors.

    Will you be like Isabelle and get back up to try again? Or will you give up on your dream? More importantly, do you have a cheer squad urging you to go on?

    Be it friends, family, colleagues, or a business mentor, it’s vital to have someone to turn to when times get tough. They help you pick yourself up and take that next step.

    It’s just as important to have them by your side when you have reached a milestone – to share a celebration of your victories.

    Watching Isabelle’s unrelenting determination to walk has reignited my belief that failure is not an option.

    What’s your source of inspiration?

  • 5 Proven Business Growth Ideas You Can Actually Use

    5 Proven Business Growth Ideas You Can Actually Use

    You’ve survived the startup stage of your business. Great work.

    What could be more fascinating and challenging than giving birth to a company? Well, like parenting, the hardest (and most thrilling) part is yet to come.

    Most entrepreneurs think that setting up a business is the most dangerous stage in their entrepreneurial venture. Yet the truth is, growing a business can be far more exciting and perilous.

    Think about it. You are most vulnerable when your business is at the verge of growing.

    As the demand for your promising product and service increases, you are busier than the day you started your company.

    Even the manager you hired is likely preoccupied with daily operations. Your employees also struggle to meet the order deadlines while keeping the quality of work high.

    Five Tested Business Growth Tips

    Many books have been written about ‘growing a business’. The problem with most of them? At best, they are impractical,  filled with inspirational quotes and vague concepts that do not resolve the real issues, frustrations and concerns faced by business owners.

    Instead of looking for quick-fix solutions, you need to examine timeless business principles to succeed when you reach the critical stage of growth:

    1. Refine or redefine your vision for the company. When you started your business, growth was one of your obvious goals. It could be through better sales, larger profits, greater market share, etc. Now,  it is worth asking yourself where you want to take your business in five, 10, or 20 years and  visualise exactly how you would get there.
    2. Identify potential opportunities for business growth. Know as much as you can about your target market and its current players through analysis and forecast. What is the nature of the new market you want to enter? Is it predictable or highly volatile? How would you size up the present players in that market? Can you win against them? If not, find underserved niche or customers and serve them better.
    3. Put in place systems, controls, and processes for growth and expansion. With your current organisational activities, will you be able to handle growth properly? One significant area worth looking into is your financial control. Some tough questions you need to answer are:
    • Have you set up seamless systems for managing your cash flow?
    • Do you know how to timing purchases right?
    • How do you effectively manage your accounts receivable?
    1. Surround yourself with great people who share your vision. Do you have the right people at the right seats? Does everyone in your company understand and work according to the vision, core values, and standards you have developed over the years? Remember that you need a cohesive team in order to move forward. Know when and how to hire, reward, review, fire and retain employees.
    1. Bring in professionals to poise your company for growth. As a business owner, you have so much to do in so little time. No wonder why some entrepreneurs look for professionals to help them manage the financial, marketing, and sales aspects of their operations. These people are business advisors with valuable skills and experience to help you come up with a structure, a system, and a sound strategy to scale up your business.

    Bonus tip: choose only one (tried and tested) entrepreneurial operating system and put it to work. Gino Wickman, author of the book, Traction:Get a Grip on Your Business, believes that there are only six fundamental factors that determine the success (or failure) of your growth attempts:  people, vision, data, issues, process, and traction.

    When all these moving parts work together  toward the same goal, your business can begin to grow successfully just as other companies have been doing for years.

    Over to you: Which areas of your business operations need more work to handle potential growth and expansion? What do you believe are the keys to sustaining business growth?