Grow your business by using your holiday planning skills
A number of business owners who ask me to help them grow their business exercise great planning skills for their holiday. Flights are booked well in advance, they are adequately insured, the cheapest parking option is secured and other options to the airport have been reviewed. See how you can grow your business in a related description.
When I ask for the planning for the next year in their business, I often only receive a blank look. Most business owners do not plan as they do not see the value or do not know what to do.
Some business owners ask their finance guy to do it and ask for the profit number. Job done. Not quite the way you want to grow your business as it’s not just a numbers game.
The key value is the process of producing the plan not the final number. Grow your business by planning growth carefully. The participants are forced to think about what they want, what is achievable and how to achieve it.
If you had a £200,000 turnover business and wanted to grow to £300,000, what would you need to look into?
A good start would be to look into how last year’s £200,000 was achieved. What marketing strategies (e.g. cold calling, emailing offers to a database) were used? How many were needed in the sales team to produce that number? How many leads were needed to achieve these sales? How often did customers make repeat purchases? how many customers referred other customers?
The answers to these questions can show the opportunity to grow your business without the need to be Richard Branson for a day.
Let’s continue with above example using simple numbers.
If the £200,000 was made by:
- 400 leads
- Converted at 50%
- Average spend per customer is £1000
- Equals £200,000 turnover
To make £300,000:
1. Shall we increase leads to 600 by making more cold calls by hiring extra staff?
2. Shall we do weekly role plays with the sales team sharing the best rep skills with the worst, thereby increasing sales conversion to 75%?
3. Shall we contact our customers more often, identify their needs fully and matching to other items in our product range and increasing the average spend per customer per year to £1500?
Shall we do all of the above and grow to £675,000?
No 2 is the lowest cost.
If we pick 1 and / or 3, do we have the cash to finance the extra man hours before results are produced? If not, how can we obtain it?
The above illustrates the kind of thinking that results in good planning and the forced focus on the right ideas to grow your business. Most businesses have all the right ideas in-house, they just need a way of bringing them out. A good planning process can do that really effectively. All that needs to happen is regular meetings to review what has happened against the plan to help find out what has worked, what has not and what we should do next.
Of the 10,000 small businesses we work with every week, “knowing the numbers” has been the consistent key factor behind sustainable growth. Remember, grow your business through detailed planning and the rewards will be plenty.