James and Megan are continuing the theme of Growing and Thriving. The last two shows talked about our own personal growth and helping others grow. Now it’s time to look at business growth and ask a hard question.
The topic: Do you want your business to grow?
Why do we need to be concerned about our business growing ?:
- This seems like a silly question: “Do you want your business to grow?”
- But it really is something that entrepreneurs need to think about and consider carefully.
- There are two sides to this question:
- The first is not growing enough or fast enough. If our business isn’t growing or growing fast enough, it could stagnate or not reach the critical mass during start-up that we need to be able to leave our jobs and pursue our business full-time.
- The other side of the question is growing too fast or too big. We need to control our growth so it doesn’t outpace our ability to deliver to our customers or grow bigger than we can manage. If we don’t we can end up hating our business and just surviving instead of thriving.
- We need to decide how and how much we want our business to grow because if we don’t it will develop its own growth rate that may not match what we want.
What do we need to manage to drive the growth we want?:
- First, go back to your strategic plan. How big do you want to be in terms of revenue, clients served, time invested in the business, and your team?
- Each of those metrics is going to determine how you run and manage your business.
- How and where will you market your business?
- How many clients can you take on at a time (if you’re a service based company)?
- How much volume (of product) can you produce in a set amount of time?
- What profit margins do I typically get?
- What are my various revenue streams?
How do we manage our business’ growth?:
- If you haven’t done your SSP, do it now. If you have one completed, revisit it to make sure it aligns with your desired growth.
- Develop your marketing plan to support your growth goals and monitor your activities. Are you getting the conversion rates you want?
- If you need to grow more, how can you incentivize your clients to give you referrals? Look at your price points or payment options. Can you space out payments?
- Don’t be afraid to say no to a customer or push a project into the future. This can be hard if you’re just coming out of the start-up phase. However, scarcity can create demand.
- If you’re growing too fast, raise your prices.
- Revisit your SSP for next year. If you don’t have one, now is the perfect time to create one.
- Review your numbers! Emily Chase Smith recommends a 20/20/20 approach. Spend 20 minutes looking at your numbers, 20 minutes meditating on them, and 20 minutes documenting specific actions. You can read more about her process here or in her book, The Financially Savvy Entrepreneur.
- Establish specific objectives. You need goals for revenue, profit margins, number of clients served or products sold, time invested, and team size.