There Are Only Four Ways to Grow Your Business
Do you know that there are only 4 ways to grow your business? Ever thought of how to get more customers or how to get them to come back more often? Ever wonder how to get more value out of each sale or how to improve your processes to decrease your overhead? At Mulberg & Associates we have the tools; resources, skills and consulting knowledge to help you build a better business.
We work with you to identify areas in your business that are not realizing their full potential and help you improve them to build a stronger, more profitable business.
So what are the 4 Ways to Grow Your Business?
The first way is to increase the number of customers of the type you want to have. So tell me, how do I increase the number of customers of the type that I want to have? First off we need to think of our ideal customers. Who are they? Are there any attributes that stand out? Perhaps they’re friendly, pay timely, and have other similar attributes. So let’s make list of our best clients or customers and ask them why the come to us.
The second way is to increase the number of times customers come back. So how do we get our customers to come back more often? Do we know how often our customers come to us? There’s the old Peter Drucker adage that what you can’t measure you can’t manage so first we need to measure how many times our customers come to us and then look for ways to increase the number of times they come back. Some of the examples we see almost daily in our lives are the loyalty programs; whether it’s a loyalty card for a free coffee or sandwich after 6 visits or discounts on future purchases.
The third way to grow your business is to increase the average value of each sale. So do we just raise our prices? Not necessarily. An example I think of is the way fast food chains started to offer meal deals and supersizes. Amazon.com uses profiling to offer discounts with additional purchases. When you go to buy a gallon of milk, do you find it in the front aisle? No, it’s all the way in the back of the store. Then we you come back to pay and you find all sorts of impulsive buys at the cash register while you stand in line. When people hand you a cart when you enter the market are they just being nice or are they helping you buy more? You can definitely carry more in a cart. Let’s figure out how we can increase the average transaction value.
The fourth way to grow your business is to increase the effectiveness of each process in the business. So how do we do that? First off, we need to look at your processes and see if we can remove any redundancy. Are we processing in batches or doing things one at a time? We want to look at overall expenses and see what we can reduce. We want to work smarter. Is it more productive to close my office door for a period of time each day and have my calls go to voicemail to focus on key tasks? Do we want one person at the cash register and one person preparing the food?
What is truly amazing is what results we can produce together by just a slight improvement in all four categories. Looking at the sample company in the handout you can see that through a slight improvement of just 1% the company realized a 480% increase in profits which translated into $52,621. Could you use an extra $50K? Many companies focus on just one of these four ways and miss out on the huge profit growth opportunities. By applying all four ways to grow your business you will achieve a synergy where the whole is greater than the sum of its parts.
When you look at this handout you will also notice the 4 ways to grow your business and see the small increment of 1% in the change column. Of course the numbers could be changed and the percentages could be changed. This is just an easy, simple representation of the how large the effect is on the bottom line can be by making small improvements in the 4 major areas of your company.
Again, by focusing on all four ways to improve your business;
- Increasing the number of customers of the type you want
- Increasing the number of times customers come back
- Increasing the average value of each sale
- And by increasing the effectiveness of each process in the business you can significantly grow your profits. In our example this translated into a 480% increase in profits. If you or someone you know would like to learn more please contact me.
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Bothell, WA, 98021
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