Do you know you want to grow your business but when you actually find that quiet hour or so to make some meaningful progress you can’t work out where to start so you don’t really make any progress?
This is a very common challenge and is why most small businesses don’t achieve significant growth.
There’s at least 2 distinct elements impacting on your ability to work out how to grow your business:
- You genuinely don’t know where to start. You have the best of intentions and then get a bit overwhelmed with all the possibilities that you end up doing nothing. Or,
- Your comfort zone kicks in to keep you safe. The problem with your comfort zone is that it doesn’t have much commercial logic attached to it, so the things it’s trying to keep you safe from and exactly the things you need to do to achieve the growth you are after.
This blog is going to address point 1: what to do if you genuinely don’t know where to start.
So where do you start?
You start by knowing your data.
Do you run your business based on your instinctive feel for your business performance or do you know your real numbers?
Most people use their instinct and not the actual data. Which do you do?
The challenge with using the instinctive answers is that they are likely to be wrong and that will send you off in the totally wrong direction.
Let me tell you a story…
Meet Fred. Fred wanted to grow his business and was convinced his challenge was that he wasn’t getting enough leads so he needed to focus on improving his marketing.
As we chatted about his marketing challenge I asked him what his conversion rate was from enquiry to client. He didn’t know.
When I pushed him he did the usual thing of discounting a load of the enquiries as not being the right sort of enquiries so he felt his “real” conversion rate was around 80%.
I wasn’t convinced so we looked at the data.
His conversion rate was actually only 40% because he simply didn’t follow up.
This meant he didn’t need to generate more enquiries but he did need to improve his sales process significantly!
Are you about to do a Fred and spend time going in the wrong direction?
I do know my data
If you do know the real data you need to look at what it’s actually telling you.
The main data points you need to know are:
Number of enquiries per month/year
Number of new clients per month/year
Average lifetime value of a client (how much revenue you achieve on average per client across the lifetime of a client)
Total revenue per month/year
Total costs per month/year (Depending on exactly what your business is you may need to understand you costs on a per product or per project basis too).
Total available capacity per month/year, total capacity used per month/year, amount of capacity billed per month/year.
Let’s take some typical situations….
Situation A: Revenue isn’t as high as you want/need it to be because enquiry levels aren’t great…
Your conversion rate is pretty good (~75%) and you are happy that they type of enquiries you are getting are of a good quality. In this case
It’s quite straightforward as “all” you need to do is increase your marketing as it’s clearly working well. Work out what additional marketing you could do, decide on the most sensible option (weighing up cost, effort, impact etc) and then build and implement the plan to do it.
Don’t go mad. A steady increase in your marketing, that you can sustain consistently, is better then going mad for a month and then stopping.
Situation B: You need to bring on some more clients but you are already at full capacity, well you are working all the hours God sends but you are billing less hours than you are actually delivering…
So how do you create the space for more clients?
The actual need here is to increase your revenue and increasing the number of clients seems like the obvious thing to do to achieve that but it’s not the answer.
First you need to address your over-delivery & under-charging so you can create the space and/or get paid what you are worth. You need to tackle this in a few steps.
- Step 1: Work out which clients are being over-delivered and under-charged and by how much.
- Step 2: Decide how to fix it. It’s probably a combination of better management of them as a client so you stop absorbing additional scope at no extra cost, and increasing your fees so they pay for the hours you actually do.
- Step 3: Implement.
It really is that easy.
Situation C: You have the bandwidth to do the business development and take on more clients but you simply don’t know where to start…
Personally I think every business owner knows what they need to do to grow their business as we don’t tend to be short of ideas, but it all goes wrong when our comfort zone decides to protect us.
So do you have lots of ideas but struggle to implement them and convince yourself it’s because you don’t know where to start?
Here’s my cure for this one…
Get a blank sheet of paper and write down as many of those ideas as possible. I bet you can easily get to 20-30 different things you could do.
Now score each one.
Give it a score for:
- How much revenue it could generate in the next 90 days
- How much revenue it could generate in the next 12 months
- How easy is it to implement (is it something you can quickly do yourself or does it need someone else’s input over a long period of time etc)
- How much will it cost to implement
Now using those scores, work out the top 3 ideas that will potentially give you a decent amount of revenue (don’t always pick the short term wins over the long term ones), that are quick and are relatively cheap to implement.
Now you have those 3 build the plans to implement them and then get cracking…
That feeling of not knowing where to start is your comfort zone trying to protect you.
You do know where to start, you just need to get out of your own way.
Remember, it’s only as hard as we make it.