Dave Lavinsky is the president and co-founder of Growthink. Growthink has helped over 1 million companies develop business plans to start and grow their companies over the past 20 years.
Learn how to increase your sales and profits by working smarter, not harder.
The key to success in business is to improve your results over time while exerting less effort. As you can imagine, this is easier said than done. However, many companies have achieved such results. They do it by employing the right strategies and philosophies.
Below you will learn eight strategies to better manage and grow your business. When used correctly, you will see your sales and profits rise with the same or less effort than you are putting in today.
1. Develop Clear Processes and Systems
Developing systems is essential to a successful business. Systems allow for improved and consistent performance.
A system is simply the methodology in which tasks should be performed in your company. The key is to not only determine these methodologies, but also to document each part of your system through flowcharts and text that are easy to follow.
Once employees are following your systems, your business will run in a consistent, high quality manner. In addition, having systems makes it much easier to hire and train new employees.
Systems allow routine tasks to be completed more quickly, saving your company time and money. Finally, your responsibilities as a business manager get vastly reduced as less questions and problems arise when employees follow your predetermined systems.
2. Develop a Business Plan
Having a concise business plan on paper clearly paves your business' path to success. Your business plan will give you two key advantages in growing your business. First, it forces you to think through where you’d like your business to be in five years or more. By thinking longer-term, you’re able to make decisions that progress your business, rather than ones that simply allow your business to survive.
Second, your business plan forces you to answer strategic questions. For example, in the competitive analysis section, you’ll identify your competitors’ strengths and weaknesses and determine ways to build competitive advantage, which will impact both your short-term and long-term success.
Be sure to use a free business plan template that includes all the key planning sections. Each section will require you to answer key questions to improve your strategy. For example, in the industry analysis section, you must research and present the size of your industry and key trends facing it. Making sure your strategies are in line with trends is critical to your company’s long-term success.
LIkewise, in the customer analysis section, you will identify your key customer segments and their wants and needs. This helps ensure that your strategies are in line with your customers. And in your marketing plan, you will detail the key strategies your company will use to attract and retain customers in the most cost-effective manner.
3. Build a Diverse Team
Attracting more customers and increasing sales is often the result of improved strategies, but also on having the right people on your team.
When hiring new employees, focus not only on how well they can fulfill the required duties, but also what they will offer to your company. For example, having a diverse team that differs in values, beliefs and backgrounds can bring a fresh, unique perspective to your company that can result in sales growth and competitive advantage.
4. Communicate Clearly
Clear communications are essential in the management and growth of your business. Only when each employee in your company understands your vision will he or she be able to execute it.
In addition, when your vision and directions are clearly communicated, your employees will make better decisions and be able to solve problems faster.
According to entrepreneur.com, business executives spend approximately 75% to 80% of their day engaged in oral or written communication. Since these communication efforts dramatically affect the productivity of their employees, it's crucial to spend time improving communication skills.
5. Get to Know Your Customers
The most successful businesses know exactly what their customers want and how to efficiently and effectively get it to them. Marketing consultant Jay Abraham once said, “your customers are geniuses, they know exactly what they want.” Companies guided by this philosophy are often the winners in their industry.
Focusing on engaging and better understanding your customers will ultimately lead to them buying from you again, and ideally evangelizing and spreading the word on how great your business is.
For example, in 2014, Coca-Cola launched a campaign called #ShareACoke, which replaced logos on Coke bottles with 250 different common names. Because it was such a personalized campaign tailored to customers, it attracted quite a lot of attention. Customers bought drinks with their names on it and posted pictures on social media to join the fun.
6. Improve Your Marketing
There are many ways to improve your marketing to grow your business.
One of the simplest and most effective marketing strategies is to do email marketing. Gather email addresses from your website or by asking customers in-person or on the phone. Then send them valuable information along with promotions periodically. According to snov.io, email marketing provides for a 4200% ROI; that is, you generate $42 in sales for every $1 spent on email marketing.
Social media marketing can also be a valuable marketing strategy. According to impactplus.com, 83% of users say Instagram helps them discover new products or services. So, getting your business on social media is a must. If people can’t find your business on social media, they might try your competitors.
Customer loyalty programs can also greatly increase sales. Research shows that it costs between three and seven times more money to acquire new customers than it does to sell something to an existing customer. So, ideally you want to gain new customers while also keeping original ones. Customer loyalty programs allow you to accomplish this.
Another effective marketing tactic is to form strategic relationships. Look for companies that are complementary to your own. For example, a brewery could offer an exclusive craft beer to a local restaurant.
A final marketing strategy to consider is hosting events. Events can help you build relationships with your customers. This is a great way to get to know them better and better understand their needs. It also can create a more memorable experience of your business.
7. Adopt a Growth Mindset
The best way to grow your company is to adopt a growth mindset and constantly think about ways to improve and grow.
To start, figure out what is working, what isn’t and how to improve within your company. And think about growth strategies such as adding new locations, franchising opportunities, geographic expansion, or selling products online across several platforms.
For example, you might be currently focused on trying to grow your business at home. In reality, the majority of the world’s consumers live outside of the United States.
Therefore, companies who don’t consider expanding internationally could be missing out on major growth opportunities for their business. The first step to making your business international is to do your homework. Research overseas competitors and the wants and needs of their customers.
8. Measure What Works and Refine Your Approach As You Go
No matter how you choose to grow your business, it is essential that you actively track your success. Remember, you can’t improve what you can’t measure.
The key here is to focus on the right Key Performance Indicators or “KPIs” to measure in your business. Examples of KPIs are your number of new customers, percentage cost of goods sold, number of website visitors, etc.
By identifying the KPIs that most impact your bottom-line results (e.g., profits) you will be able to judge your business’ progress in great detail, and quickly spot and resolve problems that arise.
A KPI management tool, for example, shows your performance at a glance and allows you to manage your metrics with dashboards and reports, making it easy to set goals for your KPIs while tracking them over time.
For example, a sales organization might have KPIs including:
- Number of new leads
- Number of qualified leads
- Number of proposals given
- Number of proposals won
If sales dip, without knowing which of the KPIs above were the culprit, it would be hard to fix the problem. However, if you determined that #4 was the culprit, then you would know that improving your business proposals is what’s needed to improve results.
While there are no quick fixes to improving your business, there are many tried and true strategies for improving sales and profitability. Eight of these strategies are listed above. While you should eventually do all eight, start with one. Implement it, start seeing results and then move on to the next one. When you’re done with all eight, you’ll be the envy of your industry.
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