20% of businesses fail in the first two years
45% don't see five years
65% don't see ten years
This market data shows how important it is to have a growth strategy that actually works and move away from being a reactive business owner to a proactive one. You see, many business owners get things a little backwards when it comes to growth and are always on the lookout for that magic potion, the next shiny silver bullet strategy. Your lead generation and your business growth problem is not going to be solved with a shiny new hashtag.
I’m talking about real, growth opportunities. The kind of growth that will change your business and change your life.
It’s way more than having a little marketing plan gathering dust on the virtual shelf and existing month to month making enough to cover payroll and expenses. It's my belief that business owners should experience prosperity and I'm fundamentally passionate that women business owners experience success. You might recall in my episode on Pricing where I reminisced about my experience in the mortgage advisor’s office and why I’m obstinately passionate about supporting businesswomen owners. Let's not go there right now...
When you stop growing you start dying
Let’s talk about business growth.
There are three ways to grow any business. We know from the legend Jay Abraham that those are
to increase the number of new clients,
increase the average transaction value, and
increase the frequency of purchase.
The secret to a well-rounded growth strategy is to work on all three simultaneously. Your marketing activity should be centred on getting and keeping new clients.
As it's almost always true that new client acquisition plays a big role in the growth and where many business owners focus, I want to talk about that for a few moments so we can understand how your growth plan can be truly effective and work for your business.
Growth Factor #1
Do you know your metrics? If you don’t, you might not be making the best decisions to move the needle in your business. If you’re focused on acquiring new clients, you need to know your client attrition rate. That’ll determine how many new clients you need to stay where you are and how many new clients you need to grow.
Simply put, your attrition rate is the total number of clients minus the number of active clients divided by the total number of clients.
It’s a key number to track. If this number is going up you need to dig into why that’s happening and reduce your attrition rate so you can reduce the number of new clients you need. You want to focus on incremental improvements, inch by inch.
If you’d like more on what numbers to track in your business, check out the post called ‘know your numbers, grow your business’.
Growth Factor #2
Most business owners I know started their business for freedom, yet we brag and joke about memes that jest at how busy we are. You know that 80% of your revenue comes from 20% of your clients or 20% of your efforts. Choose an impact area accordingly and focus on the right things. Be strategic about the growth area you give your focus to and make sure your business is working for you and not the other way around.
To give you an example, I've worked with businesses where they focus on growing a particular service area that's not profitable. It’s not profitable to sell (as in the ROI on the marketing is either breakeven or worse) and not profitable to deliver, which takes away the strategic focus from the areas of the business with more growth opportunities.
Growth Factor #3
Processes make you more efficient
I have a background in digital agencies and working with clients to automate their businesses, I guess that means this quote resonates with me on a prolific level. I do however remember the early days of business, not taking a vacation for several years because I was worried that things wouldn’t work without me, that balls would drop and plates would stop spinning.
If there’s anything that gets done more than twice, it needs a process. If there’s any process that can be mapped well enough, it can be delegated or better yet, automated. From capturing email addresses in lead generation to sales systems, follow-up, client engagement, and more, you can look at your processes as a series or parts of a system to make your business run better, smarter, faster.
These are by all means not an exhaustive list, there’s a lot that goes into making a business growth strategy work. It starts way before these factors too.
Where a good growth strategy starts
You need to validate your market and your offer by having some success at selling it organically first. Once you’ve done that and have somewhat of a track record or data in your chosen niche, you’re ready to implement your growth strategy. It’s always easier to start from there. That way, when you get to work on growth, it’s not your niche, your market, or your offer that isn’t working when you get results. And everything requires a constant and never-ending cycle of incremental improvements.
What you track and measure should be linked to your goals which need to be clear and specific.
It’s from this position of clarity, knowing your strategic intent, that you can work backward to shape your growth strategy in a way that works for you. With all your planning, the most important aspect of growth is execution, execution, execution.
Game-changing business growth requires clarity, consistency, and proven strategies. My purpose in business is to help you grow and thrive, if you’re looking for the right strategies, techniques and a guided road map to drive your business forward, I’d love to invite you to Clients Like Clockwork.
↗️ Click the link to find out more about this essential 12-week program for B2B service-based businesses.