So you have a business and business is good. Now how do you make it better? The best businesses are always looking for ways to improve, whether that’s offering better products or adopting more efficient processes. Here’s how you can take your business to the next level.
Signs It’s Time to Grow
You should always look for ways to improve your business, but there is such a thing as growing too soon or too quickly. Take American Apparel, for example, which opened nearly 300 stores just six years after its launch, then fell deeply in debt, filed for bankruptcy, and shut down its stores, becoming an online-only retailer. The lesson here? Before you invest too much time, energy and other resources into your business, make sure it’s the right time to grow. Here are some signs.
YOUR INDUSTRY IS GROWING
If your market or industry is poised for growth, it might be time to grow your business along with it. According to a report from financial services company Fundera, some of the fastest growing industries in the United States right now are real estate, hospitality and consumer retail. Jim Patterson, the managing editor of The Kiplinger Letter, shares a handful of other industries he expects to grow quite a bit over the next five years, including cannabis, online grocery delivery and health care.
CASH FLOW IS STEADY
Make sure you’re financially prepared for growth. Before you take any major steps, you should have a few years of steady revenue and a steady flow of new customers. “A consistently growing base of people who want to be customers means the demand is there,” said Paco de Leon of The Hell Yeah Group, a financial firm for creative entrepreneurs. “And steady profits means you’ll be able to grow sustainably, and you’re not putting the cart before the horse.”
YOUR CUSTOMERS WANT MORE
If you have more business than you can handle, it’s probably time to grow. Of course, sudden spikes in sales aren’t necessarily an indicator that demand is high — this could just be a fluke. So make sure you consistently have more demand than you can supply. Do they want different products that you could be offering? Interview your customers. Survey them about satisfaction, interest in new products and overall feedback about your business. Then look for patterns in the responses you get. If your customers want more of your product, faster delivery or additional services, that’s a good sign.
Decided it’s time to take the next step? Here are a few strategies you could try.
Get New Customers
Perhaps the most obvious way to grow your business is to get more customers. And there are a handful of strategic ways to achieve this, whether those customers are consumers or other businesses.
GET TO KNOW YOUR EXISTING CUSTOMERS BETTER
“To understand what people really want, you have to find out what their real challenges are,” said Ramit Sethi, the author of the New York Times best seller, “I Will Teach You to Be Rich” and founder of Growth Lab, a company that helps entrepreneurs build and grow online businesses. Figure out what made your current customers want to buy your product. This will help you pinpoint what you’re doing right, and what marketing strategies might be a waste of time. Mr. Sethi interviews tens of thousands of his own customers, who are also business owners, to find their pain points and advises them to do the same He asks the following questions:
Tell us about your day. What are the best parts? What are the hardest parts?
Have you bought something like this before?
If you could wave a magic wand, what would success look like?
If your company serves other businesses (known as B2B), ask about their business and revenue goals. You might conduct these interviews over the phone or via email. Choose a wide swath of customers: ones you interact with all the time and ones that only use your business once in a while. Either way, the interview process can help you figure out what’s working and what isn’t in your marketing.
PINPOINT WHAT MAKES YOU DIFFERENT
Many entrepreneurs find initial success copying a competitor’s business model. If you want your business to grow however, you’ll have to set it apart and find your unique brand identity. Customer interviews can come in handy with this, too.
Try it: Create an avatar for your target customer. Write a before and after description for him or her — that is, a quick bio of who they are before and after purchasing your product or using your business. You may have done this when you first launched, but it’s important to update this avatar as your business expands.
GET OTHER PEOPLE TO HELP
Affiliate marketing involves selling your product or service through a third-party who then gets a small cut of your profits. This may be especially useful for B2B companies, who can tap their existing customers to share these products with their own customers. This is a smart way to advertise and grow your reach with the help of like-minded companies, bloggers or influencers. (Of course, you want to make sure these aren’t direct competitors.) You can try to reach out to potential affiliates on your own, but make sure you have an affiliate marketing process in place to track link clicks and purchases. Tools like ClickBank and Rakuten can help you get started.
BUILD A BIGGER ONLINE PRESENCE
Even if you don’t have an online business, expanding your online brand presence is crucial to getting your product in front of more eyes, especially if your product sells directly to consumers. Some strategies you might consider:
Post content consistently. Whether you share content via a blog, newsletter or Twitter account, posting regularly will help your followers stay interested and engaged with your brand. Use tools like Hootsuite and IFTTT to schedule posts and shares.
Stay true to your brand identity. Whichever online platform you use to promote your business, make sure the content you post is consistent to your brand’s identity. For example, if your brand is about simplicity and minimalism, you probably don’t want to post something about the best Black Friday deals.
Run a promotion. Generate buzz around your business with a giveaway or contest. For example, Lonely Planet uses Instagram to encourage users to tag their travel photos for a chance to be featured on the Lonely Planet page. This expands their reach to other audiences and gets users to advertise Lonely Planet at no cost to the brand.
SPLIT TEST MARKETING STRATEGIES
There’s no shortage of quick marketing “hacks” you can play with. Split testing, also called A/B testing, helps you test out these strategies to see what works best. For example, you could test how well a green “buy now” button works on converting customers on your website versus a yellow one. Some other things you could split test:
Email subject lines: Which one has a higher open rate?
Web page titles: Which one gets more clicks?
Days you post to social media: Which day gets more engagement?
Chances are, the marketing tools you already use in your business give you the option to split test. HubSpot, ConvertKit and Google Ads, all offer this option. Play around and see what works.
The speed at which your business operates will make a big difference to your bottom line. “The most important thing for a startup entrepreneur is speed,” said Patrick Bet-David, a former financial adviser and current C.E.O. of PHP Agency, Inc, an insurance agency .
“The faster you move, the sooner you can grow your business, ” he said. There are four operating speeds to think about:
Your business functioning speed is how quickly the basic, day-to-day functions of your business get done. “The more support you have, the stronger your functioning speed,” Mr. Bet-David said. Typically, the bigger your team, the faster your functioning speed.
Example: You sell a physical product on Etsy and handle all the tasks associated with your business on your own. You create the product, manage social media, ship everything out and respond to customer feedback. You could hire an assistant to ship products and manage social media, and your business now functions much faster.
This doesn’t always mean hiring people, though. If your Wi-Fi is painfully slow, for example, switching Internet providers may increase your functioning speed a lot.
Your processing speed is how long it takes to get the product to the customer. “In real estate, this would be the time it takes to go from ‘I want to buy a home’ to actually closing on the home,” said Mr. Bet-David.
Example: You have a financial consulting business. When you get a new client, you spend days emailing each other back and forth to schedule your consulting calls. Use an online scheduler like Calendy or Square to eliminate the back and forth. Your client can now get their sessions scheduled in one step.
To increase this speed, focus on efficiency. Make a list of all the steps involved in processing a sale in your business, then see if there’s anything that can be eliminated or combined. Look at tools like Zapier, Hootsuite and Hubspot for automating basic business tasks to increase this speed. For example, if you spend too much time dealing with customer returns, tools like Returnly can automate and expedite the process for you. Or maybe your invoicing system requires an extra step that you could cut to speed up the process.
Timing speed is about leveraging the right timing to grow your business. It involves looking for opportunities and getting comfortable taking a step back in order to take a few steps forward. This is a harder one to plan for, Mr. Bet-David said. “Intuitive people are good at it.”
Example: When gas prices were increasing in 2005, Mitsubishi took advantage of the timing and offered a year of free gas for new customers, given as a prepaid debit card. The cost of this incentive was minimal to them overall but increased their sales by 7.2 percent, reported Heinz marketing. Even better, it improved their brand perception.
To increase your timing speed, focus on opportunity and positioning. Look for pain points that customers might be struggling with at the moment and opportunities to solve those problems for them. If you’re planning to launch a marketing campaign for your product, think about the best time to do this.
Expansion speed is knowing the next move you need to make in your business and when you need to make that move. But control your ambitions, Mr. Bet-David warned. “A company that’s trying to grow too fast is worse than a company growing too slow.” Expansion speed is less about expanding in the moment, and more about knowing when it’s time to expand.
Example: You have a furniture rental business for real estate staging. It’s doing well, but you’ve noticed your customers request quite a bit of children’s furniture, a category for which you don’t have much inventory. After interviewing your customers and researching their needs, you decide you’ll expand your business and invest in children's furnishings to rent. You’ll do this next year, when business profits are on schedule to increase 8 percent.
To increase expansion speed, focus on strategy and thinking ahead. “Most entrepreneurs have no idea who their ideal customer is,” Mr. Bet-David said. “You have to figure out who’s in your niche, then figure out where your market is.” Again, this comes down to knowing where your customers live, where they hang out online and what they’re searching for. Tools like Google Keywords, Google Trends, Quantcast and Market Samuraican help with this. You can also interview and poll your existing customers. What are their additional needs?
Get the Your Money Newsletter
Every week, get tips on retirement, paying for college, credit cards and the right way to invest.
If your current product or service is selling like hotcakes, it might be time to offer something brand new. “You can add more products, higher-priced products, or upgrades and add-ons,” Mr. Sethi said. “You could also consider a monthly subscription model, similar to what Netflix or Dollar Shave Club does.” If you already have multiple products, you could also get existing customers to buy more from you.
RESEARCH YOUR IDEA
You probably already know the basics of launching a new product: It starts with research. “When you discover that nobody actually wants the product you spent thousands of dollars and months creating, it’s a huge blow,” said Mr. Sethi. To prevent this, research customer data that already exists for your offering. Let’s say you have a successful money-saving app and you’re planning to expand it to investing. Research online investing communities and read reviews for books on investing. What are customers saying? What are the problems they need to solve? Some other areas you might want to research:
Competitors that offer similar products. What does their growth look like? What do their customer testimonials tell you?
Interviews and polls with your existing customers. What are their additional needs?
“Having customer conversations tells you what related services or products your business can launch,” Ms. de Leon said. “It’s important to note that your focus will inevitably be split if you decide to launch a complimentary product or service.”
BUILD A (BASIC) PRODUCT
Before you go full force with this product, keep it simple. Start with a Minimum Viable Product (M.V.P.). This is a product that meets the bare minimum requirements to be launched. You don’t want to waste too much time building a complicated product that’s too hard to measure. Plus, you want to give your product room to grow, depending on customer feedback.
For example, let’s say you want to offer a new subscription model to your flower delivery service. You might be tempted to offer a handful of different arrangement options, schedules and price points customers can choose from. Instead, start simpler: A dozen roses for $39, delivered on the 15th of every month. If your customers respond well, you can build on this M.V.P. later. To launch your M.V.P., define the solution or benefit it offers, build its most basic features, then set up your sales channel, whether it’s your email list or a simple landing page with an ad campaign.
UPSELL AND CROSS-SELL
Upselling is getting your customers to buy add-on products, and cross-selling is getting them to buy entirely separate products that might still benefit them in some way. Many businesses cross-sell and upsell on a checkout page or in a follow-up email. Either way, the idea is the same: Get your existing customers to keep buying from you.
Keep a few things in mind when you’re doing this:
Be upfront about the cost and additional value. If they’re already spending money, customers will be curious why they should spend more. Be clear about how much more they’ll need to spend. Tell them exactly what they’re getting from the sale.
Show social proof. Use testimonial videos or blurbs from customers. If you don’t have this, use numbers or data about your business — maybe you’d like them to join 5,000 other customers who purchased additional services from you.
Consider timing. Decide on the best time to offer an upsell. This might be after your customer reaches a milestone related to their original sale, or when seasons change or on a specific holiday. For example, if you’re a personal stylist, you might offer past customers new services during the fall or spring season, when wardrobes need refreshing.
“At some point, as your business grows, you just won’t have the time to be in the office, at the computer, doing the project management because you’ll be going on lots of site visits, meeting with current clients and wooing potential clients,” said Ms. de Leon. When you can’t take on additional work and you’re restricting the growth of your business, consider outsourcing to keep up with the growth and demand.
KNOW WHEN IT’S TIME TO OUTSOURCE
How do you know when it’s time to hire a team in the first place? Here are some good indicators:
You are turning down opportunities because you don’t have bandwidth.
You’re working overtime.
You turn down opportunities because you lack certain specialized skills.
You can quantify the value of a new hire (i.e. you’ll spend $30,000 a year but earn $100,000 more in new business).
If you already have a team, it makes sense to expand when the current team is at or near capacity, Ms. de Leon said.
WRITE THE JOB DESCRIPTION
You may already know the specific role you need to hire. If not, then make a list of all the work you do in your business. From there, pinpoint tasks on the list that are a repeatable process that someone else can do. You’ll see the job description come together.
Hiring help will be most effective if these operations are already in place. “The quicker you start to realize that a business is just a process that you’ve gotten so good at that people pay you for it, the quicker you can see how to make it better,” Ms. de Leon said. “No matter what you're selling — a service, a product, an application — you’re ultimately selling your special process for solving a specific problem.”
HIRE THE RIGHT PEOPLE
When pulling together your team, you want to make sure you have the best people for the job. Look at an overlap of skills fit, character fit and culture fit, Ms. de Leon suggested. “Having the right skills is only part of finding the right person for your team. They need to be able to fit into the culture you’re creating at your company.”
Test new hires before bringing them on your team. If you’re looking for a detail-oriented person, give them a detailed task. If you’re looking for someone who works well under pressure, give them a task with a tight deadline. You can also suggest a trial run of 30 to 90 days to make sure both you and the potential new hire are happy.
As for finding people, go beyond job boards and tap your network. “Some of the best hires I’ve had were from people I knew or from meeting in a community,” Ms. de Leon said. “It’s hard to judge people by their resumes alone.”
When it comes time to interview potential hires, ask open-ended questions and leave enough time for them to talk. Of course, you’ll want to ask the obvious, general questions about past experience and greatest challenges. When you craft questions that are specific to the role and to your business, however, consider those three aforementioned traits: company culture, personal character and professional skills.
LEARN SOME MANAGERIAL SKILLS
Of course, the goal of hiring a team is to make more money by focusing your efforts on the thing you’re best at while other people do everything else. “But here’s the big thing not a lot of people talk about,” said Ms. de Leon. “When you grow and you hire people, your job changes. You now have to manage another person or a group of people. You have to manage personalities and conflict and group dynamics.” Make sure this is a job you want to do and that you’re good at. Consider taking a basic managerial course to see if it’s something you would enjoy doing. You can find options on platforms like Coursera and Lynda.
“Otherwise there is really nothing wrong with not growing,” Ms. de Leon said. Indeed, growing too fast can be dangerous for your business. A report from Startup Genome Project, a research group,found that “premature scaling” is the top reason most startups fail. Growth is great, but sometimes the best thing you can do for your business is to allow it to thrive how it is. As Ms. de Leon added, “I hate growth for growth’s sake.”