Many entrepreneurs want to double the size of their business in a short period of time, but relatively few ever achieve it. Making an enterprise larger often requires a dramatic shift in thinking, something that most leaders find challenging.
The problem with most leaders is that they think linearly. They believe that if they want to grow their business, they will have to do more of the same.
The trick is to think differently. The goal shouldn’t be to “double down” on what works. Instead, it is about paying attention to the business environment, and then striking when the opportunity arises.
So what, exactly, should you be doing?
Focus On Your Brand Image
If you can’t increase the amount of money consumers spend on your products and services, it is difficult to increase your profits. Your only option is to increase production or the number of hours you work.
However, if you can find ways to convince prospects to spend more money with you, then you can really begin to build your income.
Why is it, for instance, that some lawyers can charge $1,500 per hour, while others only charge $150? Usually, it has nothing to do with their knowledge or even the quality of their advice. Instead, it’s all about their ability to convince other people that they are worth the money. When a client spends a large amount per hour on a lawyer, they feel as though they are getting the best service.
Therefore, brand image is everything for most companies. It’s what helps you escape cost competition and increase your margins above the industry average.
Start Upselling And Cross-Selling
Your existing customers are a resource: one that you should leverage in every way possible. Unfortunately, many companies don’t realize this and, instead, put all their effort into expanding their customer base.
Evidence suggests that this approach is far more expensive. And, in many cases, it is a false economy. Most firms are better off investing in their existing customers than trying to reach new ones.
Why? The answer is simple: happy customers become brand ambassadors. They do all the selling for you, so you don’t have to.
Create More Incentives For Your Customers
If you really want to supercharge demand, it’s important to create incentives for customers. The goal is to get customers to spend more than they were originally contemplating.
Remember, most customers go into business transactions planning to spend the lowest sum of money possible. Your job is to convince them that there is real value in spending more.
In many cases, customers aren’t even aware of what they want. They arrive with one idea in mind but leave with another.
Expand Your Physical Capital
Expanding your business often requires you to invest in physical capital. You need new storage facilities, warehouses, and depots.
According to Butler Buildings, an expert in the field, new technology makes physical capital expansion easy. However, many companies still aren’t aware of this.
If you’re looking to expand a business, look for ways to cheaply build out your infrastructure. Then use accounting tricks, such as depreciation, to lower the long-term costs.
Once you have physical capital in place, you’re free to increase marketing spending, add new sales channels, and sell in new markets.
Set Better Goals
When doubling the size of your business, you’ll need to think carefully about what it is that you actually want. Do you really want to double sales volume? Or would you be just as happy doubling profits?
Most business leaders would actually prefer the latter. Increasing the money you take home is better than increasing the number of sales you make.
If this is your goal, focus more on margins. If they are currently five percent, increasing them to ten percent in one year will double your take-home pay (assuming that sales remain the same).
In practice, this means reducing costs from 95 percent of your revenue to 90 percent.
You can also look at it from a different perspective: increasing sales without increasing costs. For instance, if you can increase sales to 105 percent of your current revenue while keeping costs at 95 percent, you’ll achieve the same effect.
Think about the type of margin-increasing goals that make the most sense to you. Then begin looking for micro-opportunities in your business that can help you get there.
Rethink What You’re Selling
The key to going from a regular business to one that grows consistently over time is to constantly refine and redefine what it is that you sell. Most company leaders believe that they already know what they sell. It’s obvious.
You should ensure that customers won't have to spend much time figuring out how to use or assemble the product and that they can fix any issue. Its quality is influenced by how well it resolves the intended issue. The product must also be specifically designed to meet the customer’s needs. This demonstrates your understanding of your client's problems and readiness to consider their suggestions. This is important if your business produces items like custom hoodies, t-shirts, shoes, etc.
But, in reality, they’re rarely right. The real thing they’re selling isn’t a product or service, but emotion or feeling that their customers experience.
Take some time to consider what your company actually does. Yes, you might offer plumbing or accounting services, but try to go a little deeper. Ask yourself what your customers are fundamentally getting from you.
Kodak is a good example of a company that misunderstood what it was selling. In the late 1990s, the firm believed that it sold reels of film and disposable cameras. It was highly successful in what it did for a time, but when smartphones came along, it was suddenly obsolete.
Kodak’s problem was that it didn’t understand what business it was in. It thought that it was in the camera business whereas, in reality, it was in the “creating memories” business. People don’t care about how they take pictures; what they want are the pictures themselves.
Make Your Pricing More Flexible
Here’s a dirty little secret most high-flying entrepreneurs don’t want you to know: you can charge different prices depending on the customer. This way, you can maximize your margin for each sale.
Some customers can only afford to pay the minimum price. However, others are able to pay much more (and are often willing to do so as long as you provide value).
Find ways to “upgrade” your customers to better services while avoiding dedicating any additional time to the process.