Ed Lloyd & Associates, PLLC

What are the 4 ways to grow my business?

There are only 4 fundamental ways to grow your business:

If you're at all skeptical about whether there really are just 4 ways (obviously with multitudes of strategies under each) think of a strategy to grow your business - any strategy - and you'll probably find it falls under one of these 4 areas.

Conversely, think about a strategy like 'cutting costs' - realistically that won't grow your business unless you use the money you save to promote your business. It may let you control your business better and return greater profits, but it won't grow your business.

1. Increase the number of customers (of the type you want)

If you're like most business owners your primary focus will be on the first way to grow your business - winning new customers. You've probably often thought 'I need more leads', 'I've got to get more inquiries', 'if I could just get the phone to ring and more people to walk through the door we'd be doing really well' and so you invest heavily in advertising for instance. Often there are other ways to win increased sales that don't cost nearly as much and usually those strategies go untouched.

Focusing on this way to grow your business is often far more expensive and the least leveraged. It costs up to 6 times more to win a new customer than it does to have an existing client do more work with you and that directly effects your profit potential.

Ed Lloyd & Associates work with you to find other leveraged ways of winning new customers and show you how to improve the advertising you are doing. And we'll make sure you're winning the right type of customer - someone who's 'qualified' to buy from you!

We will also work with you on the 3 remaining ways to grow your business so you're maximizing all of your opportunities rather than focusing on just one way to grow.

2. Increase the transaction frequency

Increasing the 'transaction frequency' - or the number of times someone deals with you is an important step to increasing your profitability.

In fact, some scholars say this second way is the most important of all. It's a fancy definition of loyalty, or customer retention, which in and of itself is closely related to value.

An author named Frederick Reichheld has done extensive work on the subject of customer retention. It was most recently captured in his brilliant book, 'The Loyalty Effect'. Reichheld discovered that a 5% increase in retention (of the right customers) can produce as much as a 125% increase in profit.

He didn't say a $5,000 or $50,000 investment in marketing can produce a change of 125% in profits. He said JUST a 5% change in RETENTION of the right customers.

Staggering isn't it? And, of course, you effect loyalty by delivering value and by nurturing your customers. We know how to develop your customer targeting and retention strategies.

In one moment, you'll be able to use the 'Profit Improvement Potential' calculator to find out the effect on your business.

3. To increase the transaction value, or 'average sale'

This is a 'Blinding Flash of the Obvious' or 'BFO'! However few businesses realize its importance (in fact, they do the exact opposite).

There are two fundamental ways to increase the average sale. First, by 'cross selling' or 'up-selling', both mean you encourage the customer to buy more. Ed Lloyd & Associates can teach you how do to this in a systematic fashion so it happens every time and adds value to the customer.

The second way to increase the average sale is to raise your prices. When you suggest "raise your prices" to the average business person they think you're crazy. But when you sit with us we'll guide you through what's called "The Margin Chart". It shows the direct relationship between 4 key variables in your business - price, volume, fixed costs and variable costs and you'll be amazed at the possibilities.

To grasp the possible effects on your business of increasing the average sale, you'll be given an opportunity to use the 'Profit Improvement Potential' calculator soon!

4. Increase the effectiveness of each process in your business

The fourth way to grow your business is more of an all-encompassing strategy than the other 3 ways. You see, increasing the effectiveness of the way you do business is central to everything but so few people work at it.

When you think about it, a business is nothing more than a group of people carrying out a variety of processes - the quality of the processes defines and determines the quality of the outcomes. Makes sense doesn't it?

So going back to the example earlier of a business owner needing 'more leads' we might discover that in fact, the business doesn't need any more leads rather to convert more of the ones they're already receiving! That's a sales 'process' that needs improving.

Truth is that most people don't see their businesses as a series of processes. But that's exactly what they are. To illustrate the point, consider this true story of one Results Accountant working with a client:

The accountant's client is a Turf (or sod) Farm. The farm is located out of town so most 85 % of business comes from people calling checking prices. By measuring certain results the accountant found that when people visited the farm, 85% of them bought. While only 22% of people who called on the phone actually came out to the farm.

So the key activity (or process) to change was, of course, the way in which the phone was being handled. How would a non-Results Accountant do that? With enormous difficulty we suspect.

But the Results Accountant simply "wheeled in" one of the special resources they use and ran it for the client as part of their ongoing business development program.

The results were instant. The phone conversion rate shot up to 60% (that's right, suddenly nearly 3 times more people visited the Turf Farm). Put even more simply, the resource helped the client multiply this part of their business by nearly 3 times.

And that could be you!

For more information on our business development services, to subscribe to our newsletter Grow Your Business give us a call at (704) 544-7600.