By Dave Driscoll
Owning a business requires almost limitless stamina and commitment. Putting out fires and keeping the day-to-day running smoothly often leaves owners little time or energy to think strategically about growth. Over time, this begins to show, and revenue levels off or even declines.
The sad consequence is that when an owner is eventually ready to move on to the next venture or retirement, the business is not worth what it was at its prime. Buyers are usually not interested in paying for past performance that hasn’t been maintained, despite the owner’s insistence that the business is capable of recapturing that success. The obvious question: if the business could still be that profitable, why hasn’t the owner taken the steps to do so?
Eight ways to keep your small business growing:
- Expand your client base– The internet makes it easy to reach potential clients across the world; you’re no longer limited to the geographic areas you are willing to send sales people. Does your industry lend itself to online sales? If so, explore the pros and cons of entering the eCommerce arena. If your business is based on highly-customized products or is service-based, build your brand awareness through a professional website and social media presence that highlight your expertise and reputation. Focus your marketing efforts on gaining customers that logically fit into your niche – you shouldn’t try to be everything to everyone.
- Add related products/services – Can you add variations of your products or services? Are there opportunities for related offerings to help your customers? Can you capitalize on a different application for your product or service? Consider how your customers use your products, and what they do or need before or after they use your product.
- Get in front of industry trends – Pay attention to industry associations and publications. Don’t jump into a fad that doesn’t make sense to you, but on the flip side, don’t be the last to adapt. Also, notice how the social climate and technology may impact your business – for example, online bill pay was not kind to the envelope industry. Additionally, various environmental concerns have impacted how many industries do business, package products, utilize resources, etc. Anticipate changes and act accordingly.
- Survey your customers regarding what they need – Be direct! Ask your clients what pain points your products or company could help them solve. Don’t be afraid to ask what they wish your company did better. If you lose a customer or contract, find out why; this will provide valuable insight you can use to keep current and future customers happy.
- Ask your team – Hopefully, you are not the only person interacting with your customers. Sales and customer service reps are typically the front line fielding questions and concerns from prospects and customers, and they should be consulted regularly about strategy. Operations employees will know how to make your systems better and more efficient. Brainstorm with your leadership team to take your business beyond the same old, same old. Prioritize the perspective of younger generations to help your company prepare for the future. Respecting your team’s suggestions will also build loyalty and commitment.
- Study your competition – What are they doing better or worse than your company? How can you distinguish your business’ offerings? Build on your company’s strengths, and address any weaknesses. Should your business grow by merging with a competitor that either duplicates what yours does or offers a complementary service/product?
- Step back from owner-dependence –As referenced above, you should not be responsible for building and maintaining customer relationships or making all company decisions. Businesses that are dependent on the owner are most likely to stagnate and lose value. Express your expectations for growth and empower your employees to lead the way.
- Analyze your financials – Your balance sheet and P&L statements tell the story of your business. Quarterly reporting is important to identify opportunities to grow your business. Based on the results, refine and expand your successful products/services and eliminate items and processes that are draining profitability.
These methods to grow your business seem fairly obvious, but it’s easy to lose sight of the basics when leading a business. Revisit these practices often to refresh your perspective and refocus your plans to grow your business’ value.
Dave Driscoll is president of Metro Business Advisors, a business brokerage, valuation and exit planning firm helping owners of companies with revenue up to $20 million sell their most valuable asset. Reach Dave at [email protected] or (314) 303-5600. www.MetroBusinessAdvisors.com.