Profitology

Category: Small Business

  • 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?

  • 6 Tips for Naming your Business

    6 Tips for Naming your Business

    You’ve decided to take the plunge to start your own business. Now you have the task (fun, difficult or both) of naming your business. Following are some tips to consider when choosing a business name.

    • Define your brand’s attributes before you choose a name. When deciding on a name take these attributes into consideration to ensure the name reflects them.
    • Have a clear understanding of your audience’s age, gender, income and lifestyle, so you can create a name they’ll understand. Don’t use hip-hop terms if your target market is senior citizens.
    • Choose a name that is easy to pronounce. The coolest, slickest, most evocative name in the world means nothing when customers struggle to pronounce it or, even worse, pronounce it in many different ways.
    • Try and pick a name that people will never, ever forget. That means a distinctive, even outrageous name, for example Virgin.
    • Quality Home Furnishings is utterly unmemorable. Kangaroo Kites, however, is unforgettable. If you have any doubt, ask yourself: Who’s the leading global on-line retailer – amazon.com or books.com?
    • Pick an evocative name. One that makes you think of something, see something, hear something. A name that evokes an emotional response or that resonates in some meaningful, memorable way.

    Once you’ve chosen a name you need to ensure that it is available for use. ASIC is the regulatory body which oversees business name registrations.

    You can check whether your business name is available by conducting a search of the National Names Index at www.asic.gov.au.

  • How well do you know your business?

    How well do you know your business?

    All too often I see the turnover of a business climb only to find the profits remain stagnant or worse dwindle. Consequently, the owners and staff are working harder for little or no gain.

    So what are they doing wrong? There could be a number of reasons, but generally it boils down to one, or a combination, of the following:

    • Prices are too low

    • The product or service actively promoted is not profitable

    Take, for example, an IT company, which sells computer hardware, undertakes computer repairs and services business computer systems and networks. The owner of the business is always busy attending to computer repairs and selling upgrades predominantly for home users. Despite the constant flow of work, the business is struggling to make ends meet and the owner is forced to review the mix of products and services provided.

    Upon review the owner realises that the margins generated on hardware sales, and the fees earned from the computer repairs are insufficient to return desired profits. Home users are not prepared to pay a fee comparable to the value of time and effort contributed to the repair of their PC.

    Consequently, the owner changed the focus of the business and began to actively promote their business services, implementing a monthly maintenance contract. Within six months the profits had dramatically increased and the owner was able to turn away home user repairs and sales.

    If this sounds familiar it might only take an increase in prices, or shift in your business focus to turn the business around to a profitable venture. Where do you spend most of your time, and how much profit does that generate for you?