Fundamentally there are only two ways to grow your business: increase the amount of money coming in and cut costs. If you are just starting out your cost cutting opportunities are small so you need to turn your focus to taking in more money.
Here are three management tips on how to increase the amount of money coming into your company. The first is focus on increasing the number of customers you have. The second is focus on increasing the average amount of value of each sale from your business. The third is look for ways to make sales more frequently. Each one of these topics is worth expanding on.
Increasing the number of customers for your business is all about advertising. Step one is to figure out what group of people you can help. Step two is finding all the ways you can reach those people with a message of the value of your help. All too often people start with step 2 and try to reach everyone, figuring the right people will figure out who they are and contact you. If you’ve got a lot of money to waste, this is a quick and easy way to waste it. If you want to see some bang for your advertising buck, then you must determine your target market first, and build your advertising campaign second. If you think your market is everyone, then you have not properly defined your market and you are poised to waste a lot of money on fruitless advertising. Getting new customers is the most expensive way to increase revenue. It is also something all businesses must do.
In addition to finding new customers, you can also bring more revenue into your company by increasing the average value of each sale. The obvious way is to raise your prices, but that is only one way. The others are cross-selling and up-selling. Cross-selling is offering people a related product of service at the time of purchase. If they buy a burger, ask them if they’d like fries with that as well. Up-selling is offering a range of higher grade solutions in case they customer would like a little more. You want a burger? How about trying our new steak burger its only $2 more and it tastes great!
Finally, you can have your business bring in more money by getting your customers to buy from you more frequently. There are many ways to get people to come back more often: provide exceptional service, teach people how to use your products so they use them up and need more, schedule the next appointment before they leave, or make recommendations on how often things should be done. Make a conscious decision to think about ways to make people come back sooner.
Increasing revenue comes from a mixture of these three things: new customers, higher average value of each sale, and sales to your existing customers more often. If you are not using all three of these strategies then you are missing out on some huge opportunities.
About the Author:
Daryl Cowie has shared management tips with 1000s of people in over 30 countries around the world. His mission is to help you and your company turn business opportunities into business realities.
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