Last week I wrote about Small Business Profits: 2 Secret Components to a Profitable Business and how to grow your business. One of our happy readers, Lorin asked the question “Thanks for taking the time to go a little deeper into your topic – this was really helpful and totally illustrated the point of ‘explaining what you do’! I would love to walk away with a clear message from you on how to put your strategy and bigger picture into action!”
Once you understand the two components of a profitable business, you need to start to plan your activities around that. Every business goes through three stages of growth at several variations:
Profitability Level 1: Survival Mode
At the beginning of any business, its great to think and dream big. But you are in SURVIVAL mode. Perhaps your first goal was to make $4000 a month. What most people will do is get so caught up on their website, social media, copy writing, product development, and whatever that they don’t realize at survival mode. Your main goal is to get customers.
If you have not gotten consistently your first goal, then you need to be out speaking to people, running workshops, webinars, or having one to one consultation with prospects. Staying behind a computer screen will not get you to past survival mode.
Eventually by focusing on those things, this will help you work towards bigger, median and ultimate goal in order to achieve all the other goals that you set out for yourself. Hitting this first level may seem mediocre to some, but each level is an achievement and you need to celebrate each milestone. Keeping track of your results is important in assessing what works, and what doesn’t.
TO DO: Take the time to sit down and look at all the activities you have done to reach this level ~ Be objective and be honest with yourself about it.
Where are my customers? Do they find my product useful for them? What kind of questions do they constantly keep asking?
What worked, and what didn’t?
Decide to stop doing what didn’t work, and plan how you are going to do more of what did work.
Profitability Level 2: Sustaining Mode
At this level you have steady clients, and steady income. At this point you are looking at optimizing processes to do more in order to achieve more. It’s about improving efficacy and working smarter, not harder. You are still thinking about how to ensure your clients satisfaction but looking at ways to leverage technology. For example, with my business initially I spent alot of time doing things manually. Now I have each stage integrated with a software from application forms, to docusign, freshbooks all helping me optimize the process with my clients.
TO DO: Now is the time to tip the balance between sustaining your level and growing mode ~
Invest in social media marketing to increase exposure to your target market.
Invest in outsourcing to create more time for yourself while at the same time empowering someone else.
Invest in customer relations. I have interviewed Louise, who transformed and quadrupled DP Dental in less than five years. She will tell us about how they are taking customer service to a whole new level. Taking your customer experience to a new level is key to business growth.
Profitability Level 3: Growing Mode
Most of us look at how to leverage our businesses to be consistently growing and reaching higher levels. We have to use our time and resources wisely to ensure that we get the best results for our efforts.
TO DO: Spending time effectively for the best results ~
Customer Service: How much time do you spend on getting, sustaining and growing the customers you already have?
Exceptional customer service is the cornerstone of getting more customers through referrals (word-of-mouth). Word-of -mouth customer referrals are free – they don’t require that you work to get them. You don’t need to pay for advertising.
Sustaining existing customers is also easy through exceptional customer service. Clients are more likely to remain with you if you offer exceptional service, even if a competitor offers better prices, or a more convenient location.
Boosting Profits: Growing existing customers requires consistent quality in service and product. Instead of pushing customers to go for bigger sales or upgrading their spending, show them why they should do it through good customer service.
How much time do you spend on building things not everyone may want?
Perhaps one customer mentions to you that she might like a certain service or product. You’ve heard that the customer is always right, so now you’re putting all your mental and physical energy into creating this product, thinking it’s your key to financial freedom. How many times have you done this, just to fall flat on your face – losing good existing customers who were neglected during this process and neglecting the quality of existing products and services.
A friend of mine lives in a South Africa, where some big corporations are just catching up with mobile technology, but the technology providers are not as highly trained and efficient as in some other countries. As a result, business is often affected when internet banking websites are changed and their Paypal functions don’t work as they should. As a result, the banks’ Facebook pages are flooded with complaints from clients who never wanted those changes in the first place. The changes were done to accommodate the relatively small number of mobile clients, in a country where the bulk of people don’t even use ATMs, let alone internet banking.
Instead of wasting time implementing new services or products to accommodate a small sector of clients, rather spend a little bit of time doing market research to assess whether there will be a growing interest. If you do decide to implement changes, or introduce a new product, keep these thoughts in mind:
1. Start small – don’t produce thousands of products first time round.
2. Test – keep the current version while allowing customers to test the new one.
It’s important to have a feedback cycle that allows people to give you their perspective on the changes to see whether you have a winner, or whether you should cut your losses and go back to basics.
Clients like innovative products and services. Being different from the competition is good, but you need to stay true to your brand. Sudden, radical changes are very risky – rather introduce slow and subtle changes. Be gracious about feedback. See the feedback as constructive criticism aimed to help you, rather than being over-sensitive and feeling insulted.
At which stage of profitability are you currently and what steps did you take to get there? Please feel free to share the tips that helped you grow your business below in comments.