Q: I have a very successful business, and I'd like to keep growing, but I'm unsure how to take it to the next level. What are my options?
A: Business growth occurs when your business is experiencing permanent increases in profit as a direct result of measurable and sustainable increases in "sales volume." Only increases in sales volume that generate additional profit can be considered to represent real business growth. For example, your business may temporarily cut its prices, generating increased sales, in order to achieve a larger share of the existing market for your business's products and/or services. But business growth will only have occurred when this increased market share leads to future sales that are profitable.
As the owner of a business that's already successful, you should first identify your business's growth (increased profits) to date, then determine what spurred this growth. Do this by determining which marketing efforts have historically made the greatest contribution to your business's increased sales volume. Then you can exercise your first option for growing your business: continue implementing those successful marketing efforts.
Your second option is to consider new business growth strategies that can be expected to generate additional profitable sales, such as the following two important strategies: selling more to your existing customers, and selling to new potential customers.
Selling more to your existing customers, called an "upsell," typically doesn't just happen. In order to sell your customers more, you have to be prepared to actively market to them, and to do so continuously. Some strategies:
- Offer incentives, such as quantity discounts, to encourage multiple quantity purchases. An example would be to offer a "buy two, get a third free."
- Bundle similar products and/or services with or without a discount-for example, a stereo receiver, a CD player and speakers.
- Offer complementary products and/or services that are natural
companion purchases. For example, when a bank provides its
customers with banking services and also offers securities
Next Step Get more ideas for growing your business in Every Business is a Growth Business: How Your Company Can Prosper Year After Year by Ram Charan and Noel M. Tichy.
- Add additional inventory as a way of encouraging additional sales of new products and/or services. The additional inventory can be funded by increasing your investment in your business or by offering another business's products and/or services to your customers by way of a "strategic product alliance." This alliance allows you to offer selected products and/or services of the other business, without having to invest in any additional inventory.
Selling to new prospects should be an ongoing effort to add new customers to your existing customer base. Some strategies:
- Share your customer base with another business. This strategy allows you to gain access to another business's customers to whom you can market your business's products and/or services. This is referred to as a marketing alliance.
- Target the existing customers of a competitor by making the competitor's customers aware of your business, referred to as a "major sales advantage" (MSA). The MSA consists of such advantages as better-quality products, higher levels of service after the sale, a larger variety of inventory and/or services to choose from, or lower prices.
- Engage in "direct-response marketing." This consists of the application of marketing strategies that are designed to cause the potential customer to "take immediate action," such as coming into your store or picking up the telephone to call your business.
Whichever methods your business uses to achieve increased profits from measurable and sustainable increases in sales volume, it's important that you identify "repeatable processes" that can be implemented again and again to provide the ongoing business growth you are seeking.
David Meier is founder and COO of Small Business 411, which provides small-business owners with ongoing business coaching and the knowledge and support required to enable them to become truly successful entrepreneurs. Visit the Small Business 411 site at http://www.smallbusiness411.com.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.