The 4 Ways to Grow Your Business
Whenever we run one of our workshops, our members all share one, common goal: To grow their business. Growth means something different to everyone. A lot of people want to boost their profits by 50%; others want to be able to take on 20 more clients; some just want to be able to employ someone to help improve their performance.
Growth is one of our founding principles, so it’s not a surprise that so many people want to achieve this. But how exactly do you grow your business? When you hear success stories of international business goliaths, they all talk about how they took their company from infancy to global fame, but how exactly did they do this?
In truth, business growth is not about having luck or some intangible star quality, it boils down to four basic steps. Whether you’re a one-person operation or the likes of Amazon or Google, following these four simple tactics will put you on the same path towards progression.
- Leads
One of your growth basics should be marketing. The phrase’ you’ve got to speculate to accumulate’ could not be truer when it comes to this arm of your company. Ultimately, if you don’t spread the word about how your business can benefit people, you will never make it past day one.
I think most of us understand the importance of marketing, but I see so many companies failing in this area. Time and cost are your two biggest enemies here, but they are also the two allies that you desperately need. To truly grow your business, you need to invest both money and time into your marketing, so that you can reach your ideal clients, who in turn will inject cash into your company. However, how can you do this if you don’t have an abundant supply of the two basic ingredients? Leads turn into profit, but how can you generate them if you don’t have time or money? A quandary for sure.
There are no rights or wrongs when it comes to marketing. Every business is different and every client will respond differently to the various marketing mediums on offer. For example, digital marketing for an online product aimed at the under 50s should make sense, but it may well be that a physical event that showcases your business’ personality, and nurtures your real-life relationships with your clients, may hold more resonance and produce far better results.
Sadly, you’ll never know what works until you try it, so I encourage you to trial a wide variety of marketing tactics until you find what works for you, and track what’s working and what’s not. However, casting your marketing net wide takes time and money, which leads back to the dilemma we’ve already mentioned.
So what can you do to produce more leads, without eating into your time or budget? It’s actually quite simple: Referrals.
If you want to find more clients, there is a huge resource that can help you: your existing clients! By their very nature, your clients have already bought into what you do. They want to see you do well and they want to help you do that, because that makes sure that you are there to continue helping them in the future.
New clients generated through your existing clients are the most time and cost-effective leads you will ever receive. They are also far more likely to convert and fit into your business model. To gain more leads, you have to give back to your existing customers and clients. By nurturing existing relationships, and asking for introductions, you’ll not only have happier customers, you’ll also save a fortune on marketing .
- Partnerships
This next point arguably also falls under ‘Leads’, but it’s so important that I believe it deserves its own section. The second way to acquire solid customer leads is by working alongside other businesses who share your ideal clients.
As a business owner, have you ever felt that you are torn in two directions? Part of you wants to provide an exceptional level of service to your existing clients, but the other part of you wants to generate new business and grow your firm. But which is a priority? Service or sales?
The truth is that both existing and new clients are equally important and neglecting either of them could be catastrophic. If you invest all of your time into ongoing work, you will eventually run your pipeline dry and experience decreased profits. However, if all of your efforts are focused on generating new leads and revenue, your loyal client base will become disenfranchised and their dissatisfaction will push them straight through your competitor’s door.
So, what is the solution? Employ a sales team? Take on a team of service-based professionals to nurture your clients? If you work for a huge corporate firm, this is probably the exact solution you’d implement, but what is you don’t have the financial resources to fund such an expensive strategy? And, more importantly, what if your clients want to form a meaning relationship with you, rather than being passed from pillar to post?
When I was working in the world of finance, I regularly crossed paths with numerous accountants, solicitors and tax experts, so I decided to approach the professionals I came into contact with to see how we could work in collaboration. Most of these professionals were also my client’s advisers, so selecting who would complement my business was a very easy decision. I also had a very good idea of who, in my local area, was well regarded and held the level of qualification and experience my client’s deserved.
Once I had decided who to work with, I then contacted these other professionals with my idea of a collaboration, which was met with a really positive response. Without sounding arrogant, I wasn’t surprised by this response; after all, if someone came to me and said that they could provide me with qualified leads, give me more time to focus on my existing business, and ensure that my all my client’s needs were met, I’d jump at the opportunity!
I’ve found that it is relatively easy to find other firms that will agree to do this in concept, but much more difficult to then actually make it work. However, it boils down to one key principle: You need to establish what is in it for them.
There are many ways to incentivise other businesses to work with you. The most obvious way is to giveaway a share the fee you charge your client. This is perfectly fine, and I am more than happy to do this, but be mindful if there are any regulatory requirements or restriction.
If the businesses you approach aren’t looking for a share of the fees, you need to be clear what is in it for them. Is it adding value to their existing client service, or are they expecting referrals back? Make sure this is clear at the outset of the relationship, and that you can deliver, as sometimes it isn’t easy to refer in the opposite direction. Or perhaps they don’t want a fee share, and you cannot refer back, so find something else. Is it a day out, or offering your service for free? There is always something you can do. If it is an activity or an experience, try and find something that allows you to spend quality time with them, so that you can reinforce and strengthen your relationship, for example a meal out, a day at the cricket/rugby, or maybe a game of golf all work well for me, but find something that works for you. The important thing is to establish what motivates them to refer clients to you, and to make sure you deliver on that.
- Know Your Numbers
I often get asked what the most common mistake business owners make when they are growing their business. While I could say it is not setting goals, planning their time, generating enough sales or having effective marketing, the truth is that it’s often their lack of financial understanding.
As a business owner it is paramount that you have a firm grasp of your numbers. Failure to do so is a massive risk to your business and your wealth. If you don’t get to grips with the key components of your company’s cash you will be operating in the dark. How else will you know how much you can invest in marketing? Will you be able to afford new employees? Will you even be able to afford to continue servicing your clients?
You don’t need to be an accountant or financial expert to be a business owner, but working alongside one should be top of your financial priority list. Utilising the services of someone who can decipher and explain your balance sheets and profit and loss statements will give you far more control over your finances. But it doesn’t stop there: you also need to understand your company’s pensions, investments, asset value and tax obligations. An expert will help you to identify risks and show you how to plan more effectively, save money and potentially grow your business’ capital.
The other side of the ‘knowing your numbers coin’ is Cash-Flow Forecasting, which is a crucial element of the financial management of your business. Just like your life, it is important to plan ahead. Cash-Flow Forecasting will enable you to ascertain what your future cash requirements may be, for example, if you are planning to expand, take on more employees or change locations. Planning for future costs may also help to prevent a future crisis, which could cause your business to close without making you any profit for yourself or your family.
You may have heard the expression ‘cash is king’ in business: ‘Sales are vanity. Profit is sanity. Cash is king!’ But why is this? The answer is quite simple- if your business runs out of funds, and is unable to obtain a loan or additional financial backing, it will fail. In this scenario, you could be left with nothing- a huge risk to your business. Cash-flow, especially in the early days of your organisation and if you are a small business, is your lifeline. Make sure you understand it and know how to predict it. After all, cash-flow could mean the difference between you doubling your wealth or you owing money to a company that is forced into liquidation.
A final note on this section: Review your data! Having glossy copies of your annual accounts and a beautiful graphic depiction of your cash-flow is wonderful, but alongside understanding them you need to continually review your financial data to make sure you’re on track. It’s crucial to always have a firm handle on the financial comings and goings of your business. I’d recommend to review daily costs and income weekly and to review the bigger picture on a least a quartley basis.
- Amass Your Wealth
It probably will seem quite odd to be posing this question in the final section, but why are you growing your business? Yes, you want to be able to gain more clients, increase your team and boost your revenue, but what is the ultimate goal here?
For most business owners, the end goal is to be able to fund a lifestyle that you love. Whether that’s the ability to go on amazing holidays and adventures, support your family or retire early, the business growth that you’ve chased all points in one direction: Your happiness.
So, now you’ve got an abundant influx of leads and a firm grasp of your business’ finances, there is on final piece of the puzzle. It is all very well finding ways to make lots more money, but only if you then use it wisely will it allow you to create the future you want, both for you and your business. Afterall, having a healthy bank balance is lovely to look at, but that alone will not automatically help you to fulfil your ultimate goal. To truly enjoy the fruits of your growth, you need to make money whilst you sleep, and resist the urge to splurge the capital that you’ve fought for.
When I was a Chartered Financial Planner, making the most of people’s money was, of course, my bread and butter. I love helping people like you improve their business, and one of my greatest strengths lies in helping you create a better financial future for you and your loved ones. I realise as a business owner that you are often so focused on making money within your business that you give the money you make, and particularly the money you have withdrawn from the business, even less attention. We need to change that now.
You know your business, but do you understand how to make the most of your money? You may have a pension, and maybe even a financial adviser, but do you know whether you are on track to have enough money for the future you want? Will you be able to afford to retire when and how you want to? Will you be able to afford to fulfil the bucket-list goals that you have been promising yourself? Will you be able to afford to live where you want to in retirement? Will you be able to afford to pass your business down to the next generation if they want to be involved? Will you be able to create a legacy, rather than just leaving a few items in a will?
Everyone’s life, business and financial goals will be different, but it’s important to give some thought to what your ultimate target is. In finance, we often call this your ‘Financial Freedom Number’. This is the figure that you, and your business, need to hit in order to comfortably achieve your goals. It is important to consider that with a Financial Freedom Number, your income is almost irrelevant- it is your expenses that count. For example, if you earn £100,000 each year you have a high income. But, if you spend £90,000 per year that money would not last very long if you were to retire or need to take an extended period out of the business.
So why exactly do you need to understand this number? Well, knowing your Financial Freedom Number will change your focus and drive in the business. Without having an exact financial goal in mind, you are simply attempting to earn as much as possible, but without any real reason. Mitch Stephen, a Real Estate Investor from Texas gives a great explanation of this in his blog: 'Financial Freedom happens when your wants and your needs are exceeded by your passive income.’ Once I heard that definition, everything changed… everything became crystal clear to me. I had been chasing money without knowing exactly why or how much I needed. How much was enough? I had nothing to measure by. Until I heard that definition I had always assumed that people who were ‘financially free’ were rich. After hearing that definition my life changed completely because I finally understood that being financially free and being wealthy were two completely different things.
Understanding why you’re chasing growth and what the ideal figure is that you need to reach will light the fire under your desire to grow. It will also mean that you can make suitable financial decisions to reach your destination.
How you can amass the money you’ve made through business growth will differ for everyone. There are plenty of strategies to use here, from investment vehicles, tax-planning mechanisms and estate planning opportunities, but the overriding principle here is to work alongside an expert who can help you to select what’s best for you and your needs. And, as ever, continually review your plans, so that you know for certain that you are on track.
