There are hundreds of strategies for business growth and it’s easy to get lost in the google maze, so here I am going to go through some of the strategies I employed when growing my businesses and from the perspective of looking back at what I did and by highlighting some of the mistakes I made over the years, in the hope that you can avoid them.
Hindsight is, after all, a wonderful and exact science!
In my capacity as a business coach and mentor, I have to really try to curb myself when talking to clients because on many occasions, I can see the person going straight down the exact same path that led me to fail with a particular strategy or action and it’s always a fine balance between letting the person learn from their own actions and averting a major disaster.
That’s why I like to put up my information here on my blog because you can read and digest what I did and still do, make up your own mind and if you feel the need to, you can contact me and I will happily give you my advice.
I have compiled a list of key points that I feel need addressing when it comes down to business growth and they apply to all businesses.
So let’s begin!
Resist the temptation for doubling your turnover
This is the one that I decided to put up first, simply because you will have already had the thought of growing your business and you may be tempted to go down the route of doubling your existing turnover, or if you are starting from scratch, to put down some ridiculously unrealistic sales target for your first year of trading.
Turnover for vanity…profit for sanity
As the saying goes!
Turnover is simply a measure of the sales activity that you achieve in a fixed period, whereas profit is the real measure of your sales success — don’t overly obsess with levels of turnover and look to maintain or increase your profit margins as you grow your company.
This is critical.
In my case, I was able to significantly increase my turnover and maintain my profit margins over a six-year period, which on the surface looks fine…but it came with a whole load of other problems which prompted me to write this article.
Related:
How I started my first business from a living room in London.
Build a solid foundation
You have to have a solid platform for business growth and think of a pyramid, with its wide base that supports each layer of added infrastructure.
I have seen far too many businesses go bust simply because they grew without a solid foundation and I should know because I was one of them!
Building a solid foundation means that you address each component of the business growth phase and make sure that you can support it should it not function optimally or if the unthinkable happens and it collapses.
An example would be if you are looking to expand into other countries and you don’t fully consider the culture, language, and commercial implications fully, or short-cut the process to get quick growth.
I remember building a huge amount of sales in one country, only to later discover that due to the reclaiming of withholding taxes back in the UK, I actually lost money on each deal that I did.
It was a tough and painful discovery that I’m not sure could even have been avoided because the taxation rules had changed over time.
Don’t fall into the temptation to grow too quickly without addressing the critical issue of having a stable foundation for growth.
Related:
Business failure: Why my first recruitment agency failed.
Cut back on your hiring
Long with your desire to double your turnover or whatever number you feel you need to grow, there is another little lightbulb that goes off in your head, and this time, it relates to going on a hiring spree and equating that spree with business growth.
I’m currently working with a real estate startup in the US and the initial strategy was to create a solid sales and marketing funnel that will generate a ton of high-quality leads and inquiries to then hand out to a team of salespeople who will go out and turn them into sales.
Looking at this at face value, it seems to be a good growth strategy, but after looking at twelve potential real estate agents, we decided that none of them demonstrated the passion or commitment to represent the brokerage to the standard set by the founder and CEO.
It is critical that you never lose sight of the vision and mission of your business and you must think carefully before you go on a hiring spree, which may well increase your sales and profit margins but may also cost you in other ways that will come back to haunt you.
This happened to me when I expanded overseas from my base in London and the small, high-performing sales team that produced my greatest results on record, became lost in both my growth plans and suffered from the lack of my focussed attention.
Create a plan for growth
I’m not talking about a business plan here, but a specific plan for growth.
You need a solid business plan which you hopefully would have produced before you started your business and a growth plan is simply another dimension that will sit over the top of your existing plan.
Your goal here is to re-examine the data you have produced in your business plan and make sure it is still viable when you embark on your growth phase.
For me, I learned this the hard way and simply went on a major sales surge without looking specifically enough into the effect it would have on my original numbers and forecasts.
I foolishly believed that I could “sell myself” out of anything and the resulting growth in sales and profits would take care of any problems — the result was positive, in the sense of hitting the numbers and profits, but the existing infrastructure was in no way set up for the result and in the end, I had to completely re-vamp and overhaul the operational side of my business at a huge cost.
Learn to predict industry and market trends
You absolutely must know your industry, market and be able to identify and predict specific trends long before they occur if you really want to master the art of business growth.
Too many entrepreneurs and businessmen are oblivious to what’s really going on in their industries, simply because they are not looking — don’t make that mistake and make sure you conduct specific research, starting with the global economy and then drilling down into the details of your specific industry.
I cannot stress enough the importance of this.
The global economy is currently powered by the US and what happens over there, will have a direct result on the global economy, — so it is important to keep track of events and indicators.
Every business will fall into a sector and the next step from the global indicators is to look at how they affect the specific sector your company operates in.
Lastly, you have to understand the dynamics of your own industry and look at trends, with the goal of trying to predict them.
When you complete this type of research, you will have so much more knowledge than many of your competitors and also plenty of talking points that you can use when interacting with clients.
Your goal is to predict trends and align your business accordingly — or to put it another way, be there before your competition and in some cases, your clients.
Check your finances
This is the tricky one — do you have the right finance structure to grow your business, do you need to incur any debt to do so and if you are self-funded, how much capital will you tie up in your growth plans?
These are just 3 of a multitude of financial questions you must address and answer before you begin.
In my technology staffing services business, I had the problem of paying out freelance salaries long before I could receive payments from clients and if I chose to use my own profits and cash flow, to finance my growth, it would take far too long and I would lose a ton of growth opportunities.
Luckily in my industry, there were specialist finance providers who would release monies from the invoices I raise, which gave me a constant supply of cash to re-invest for growth and as my margins were healthy, I could afford the fees.
The risk to me and the business was centered around my customers not being able to pay, or paying their invoices late, which would impact the cash I could receive, but I was dealing with large, international organizations that were creditworthy…at least at the start of my journey!
You must look at all of your options and get specialist financial advice, before committing to any form of business growth.
Get the right advisors
The right business advisors will pay for themselves several times over and it is essential that you surround yourself with experts who can help you grow.
As a business owner, CEO, or entrepreneur, you will experience a degree of loneliness when you run your own company and even if you have business partners.
Also, you will not have all of the skills you need to grow a business optimally and for example, my focus was sales and marketing, so I needed a ton of support on finance, technology, and general business management.
Unfortunately, I believed I could “do it all” and I did…to a degree, but that degree was far from optimal and it cost me a ton of money in the long run.
Get your advisors on board from the start and make sure you chose the right ones.
Related:
Business coaching: An entrepreneur’s guide to hiring and becoming a coach.
Control your operational costs
My operational costs spiraled out of control when I take a look back on how I grew my company rapidly over a six-year period…but at the time, I was oblivious to those rising costs, simply because I was making profits I had never experienced before.
But I could have made a lot more.
When I was flying around the world, pitching my services to high-level executives, and winning deals, the last thing on my mind was how to run the back-office systems optimally and as long as it functioned, I really didn’t care.
The actual situation was far from ideal and there was a ton of inefficiencies ranging from having the wrong people to duplication of people and in some cases tasks.
I had also let the area of credit management slip and that resulted in having more cash tied up with unpaid invoices, which ultimately affected the amount of money I could draw down and use as I was raising new invoices due to my sales success.
It was a false economy and one that I simply didn’t realize.
With regard to the US real estate startup I am currently working with, I literally hounded the founder and CEO (who is very similar to me) to focus hard on making sure his operational systems were firmly in place before he went on a sales spree.
So far, it is working well.
Pay attention to the detail and also to the tasks you may not like to perform in your business, but are absolutely necessary to understand and have firm control over.
Get your pricing right
I am constantly amazed at how many experts emerge out of the business coaching space recently and I have seen a few emerge in the area of pricing — some who seem switched-on and capable and others who are clearly only in it to make a quick buck.
All aspects of business are integrated and you should beware of so-called experts who specialize in a niche, without a deep understanding of every other business component and when it comes down to pricing, there is only one piece of advice I can offer you — the market will ultimately determine the price and your challenge is to make sure you are always ahead of the curve.
If you bought a plasma television when they first came out, then you would have parted with a small fortune compared to what you pick one up for today.
Price erosion is natural in technology and it follows in other industries, especially where there is disruption, automation, and the willingness of other businesspeople to do things better, faster, and cheaper.
Don’t fall into the trap of “holding your price in relation to the value you provide,” as I hear from a lot of business gurus.
Pricing is dynamic and the business world is becoming ultra-competitive, so make sure you are constantly in tune with the dynamics of your industry and that you also keep a keen eye on the activities of your competitors and new market entrants.
By all means, equate your price to the value you offer, but remember that your customers really don’t care and are constantly looking to streamline their own costs.
When I first entered the US market for my staffing services business, I operated an open-book pricing policy where I disclosed the margins I made and gave the reasoning to the customers and those margins were considerably more competitive than the local suppliers.
This was totally uncommon over there and it led to a series of questions to existing suppliers to the same customers, many of whom refused to do the same — their contracts were allowed to run to completion and then terminated.
And this was around twenty years ago, so it was disruptive for the time!
Related:
Business mentoring: How to make sure the price is right.
Refine your sales and marketing strategy
Nothing happens without a sale and the job of marketing is to make sales redundant…if only it was that simple.
I’ve seen companies spend a small fortune in developing elaborate sales and marketing funnels as well as hiring a bunch of salespeople in the hope of very quickly growing their turnover and profits.
However, I have rarely seen this strategy work and in some cases, it has led to serious cash flow problems with the companies concerned.
You have to be very careful when it comes to hiring salespeople and when devising your sales and marketing strategy.
It all really comes back to your understanding of the industry, your sector, and customers — the more you know about them, the better and it’s not just about solving customer problems and addressing pain points, but being able to anticipate future needs and problems, then aligning your services accordingly.
I grew my own business by leading from the front — I made sure that I was the first person any customer would see, plus I explained the fact that I was the owner, could make rapid decisions and remained totally accountable for everything.
It was a powerful offering and gave me a distinct advantage over y competitors, whose owners were probably spending more time on the golf course than seeing their customers.
Keep your sales and marketing strategy simple…just contact your customers directly and make sure you have done your homework.
Leave the elaborate and fancy marketing strategies for later, when you have proven your sales strategy works and you have the cash to invest wisely.
Related:
What to look for in a candidate when hiring for the sales department.
Engage with the C-Suite
This is part of the sales and marketing strategy, but I feel it deserves attention on its own because it is the most important part of devising your sales and marketing strategy.
You absolutely must engage at the highest levels with your customers and don’t listen to anyone who tells you otherwise!
Many people refuse to accept that the CEO/executive leader/business owner is directly involved in the day-to-day operation of their companies and that you need to connect with the people that are responsible for the specific business functions that you are selling into.
This is true…but if you start at the top and allow the process to naturally flow you down to the specific people, you will have made your company name known at the highest levels, will have a chance to talk strategically to the ultimate power in the organization and you will have the luxury of being introduced from a higher authority.
Working from the bottom of the organization upward is another method, but it is nowhere near as effective as this one and I learned this the hard way.
People don’t realize that the CEO can overturn a decision in a heartbeat, can miraculously allocate a budget to a new project, and that they absolutely buy into anything that can help their company grow its revenues, reduce costs, or better still, both.
But be warned, you must approach this level carefully and be fully prepared.
Operating at this level does not require “selling,” but the ability to influence.
Related:
Sales training: The ultimate guide to help you become a key influencer.
Create customer loyalty programs
Back in the early days of starting my main business, I worked with our finance provider to devise a customer loyalty program that basically gave a cashback to my main customer.
I can’t take the credit for this first program, but it did inspire me to roll it out to future customers.
The customer in question was a large multinational manufacturer who simply asked for a volume discount and through the sharp mind of the head of my finance company, he came up with a cashback offer that delighted them, which gave us an immediate edge over the competition and thanks to the extra volume of business, we slightly lowered our margins, but maintained our cash contribution, so the result was excellent.
You see volume spend discounts and rewards everywhere in business today, so make sure you don’t shy away from the concept, which some people believe devalues your business offering.
It does not and it is simply the way of today’s business world!
Build multiple niche verticles
Niches are great because you can very quickly become a powerful force when you operate in a specific one…but on the flip side, they can leave you woefully exposed.
The key in business is to be able to diversify and this will actually accelerate your business growth in the long term, but you have to do it carefully and with precision.
I operated in the technology staffing services industry and then I found a specific niche in telecommunications.
The trouble was that I was too exposed and when the tech bubble burst in the late 1990s, I face a serious market downturn that saw many of my competitors and customers go to the wall and it was only my previous experience of surviving a recession that saved me.
Looking back, I should have first addressed other technology niches, such as biotech or medical tech as two examples and then looked to explore specific niches in other staffing sectors.
This approach may well delay your business growth in your own sector, but it may serve to protect you in the long run.
Related:
Business mentoring: Why the riches may not be in the niches.
Get online
You don’t need me to tell you how the Internet has changed the way we work, live, and play, and if you are in my generation, then you will have seen this technology grow and develop out of nowhere, and equally, you know what life was like without it.
The online business world is booming and it has never been easier to start a business online, but if you are a bricks-and-mortar type business, don’t overlook the benefits of taking at least some of your business functions online.
It’s vital that you take advantage of this and other emerging technologies and use the opportunities to automate systems and processes where possible, but with the caveat that you firmly maintain the “human touch.”
It’s about striking a fine balance.
Too many businesses rely on automation and are disconnected from their customers, while others are not even exploring the opportunities to improve efficiencies and reduce costs.
But don’t obsess with technology and race to implement it — take your time and make sure the tech is for the specific benefit to your customers.
I used to grab technology as it emerged, trying to be the first with that new “toy” that served no real purpose other than to stroke my own ego.
Don’t make the same mistake.
Related:
Business technology management: Don’t rush to keep up with tech.
Use acquisition
If your business growth strategy works correctly, then sooner or later you will be in a position to acquire other companies to facilitate that growth.
There comes a point where it is simply more effective to seek out competitors who are in your sector, but where you feel you could add more to the company if they were under your management.
Acquiring a business is an extremely specialist area and you must make sure you have the right advisors in place to do so.
I recently came across a company that had acquired 3 competitors in the same industry, and believe it or not, these deals were done in cash and not in an environment conducive to conducting business.
And I am talking about a very specialist industry here.
Talking to the owners who had acquired the 3 companies and who were looking to acquire a fourth, my advice was simple and that was to get some specialist advice because from my own analysis, they had achieved the growth in question, but left themselves exposed from a legal perspective and wide open to future claims form the owners of the companies they acquired!
An extreme example I agree, but nothing surprises me in business!
Conclusion
There you have it — some of my strategies for business growth that I hope will save you time, money, and heartache.
We are living in very uncertain and volatile economic times, but that doesn’t mean there are no opportunities for business growth…far from it.
The main point I want to get over to you is to make sure you plan for optimal growth and please resist the temptation to fall for the endless promises you see and hear from the multitude of experts and gurus who claim to have the “secret.”
There are no secrets, just hard, smart work and careful planning…plus a little luck!
If you want to talk further to me about this or any other business subject, then please don’t hesitate to get in touch.
neiljcfranklin@gmail.com
Neil Franklin
Last modified: May 6, 2021
