I have never spoken to a business owner that doesn’t wrestle almost daily with the question of how to increase the turnover of their small business. I’m sure there are small business owners out there that are turning work down and worrying about scaling their business down to restore their work-life balance. It’s just that I’ve never met them. The small business owners that I deal with each day seem to intuitively understand that if you aren’t growing, you are shrivelling up and dying.
As you have pondered this question of how to keep your business growing, you’ve probably felt a little bit bewildered when faced with the choice between the many, many ways to achieve this goal. It can be intimidating just trying to figure out where to start. The truth is that when you boil it all down, there are only three ways to grow your small business. These are:
Thinking about it this way really helps focus the mind on the key metrics that will drive the growth of your small business. It’s amazing to see the impact of a small change in these numbers on business growth. Let me illustrate.
Let’s say you have 100 clients that spend an average of £250 with your business twice a year.
Now let’s say that you work to increase these three numbers by 10% in a year.
That’s an increase in turnover of one-third just by increasing those variables by 10%. Now let’s imagine if we could achieve a 25% increase in all three of these numbers.
That’s almost double the original turnover by focusing on three key numbers and achieving a sizeable but achievable increase in them.
At Continuous Business Planning, we talk again and again about Key Performance Indicators (KPI’s) and the importance of choosing the right ones to focus upon. If our focus begins and ends with the number of people that like the company Facebook page or the number of leaflets distributed, then we are setting ourselves up for failure. We cannot and must not confuse means with ends. If our goal is to increase our business turnover, we must focus religiously upon those measures that help achieve that goal. Simple? Yes. Easy? Most definitely not.
The good news is you don’t need to devote any more time to the question of how to increase the turnover of your small business. We've solved that problem. All that remains now is the small matter of achieving it. That will involve some trial and error until you find the tactics that work best for you. Initally at least you may fail and those numbers may stubbornly stick exactly where they are. However, if you are determined enough to keep trying and trying new ways to move your numbers in the right direction, you will eventually succeed. Success seems to be the preserve of those most focused on their "magic numbers" and most determined to move the dial in the right direction. What are your magic numbers? That will depend on your business goals, but if you are struggling why not use the three levers behind all business growth that we've outlined above. You'll be glad you did.