In last week’s episode we reviewed the 6 Ways your business can ‘Be Better’ with the existing resources you have. Sometimes, however, you absolutely, positively, have to ramp up the size and power of your business.
It’s time to ‘Be Bigger’ – so let’s talk about the 6 Ways you can increase the size of your engine. Those of us with Payroll Tax phobia may be surprised that only 1 of those 6 requires hiring more people.
If you’ve enjoyed this recent series on defining, refining, and building your Capacity Engine in business, make sure you re-watch Blackboard Fridays episode 29 where I talk about using this framework to set your strategic roadmap in business.
This sequence of priorities – Be Better, Be Bigger, then Be Better again, then Be Bigger again – is the fastest way I’ve found for business owners to achieve their vision sooner.
Which of these 6 Ways to grow are you implementing already?
Watch this week’s episode here.
Who is Jacob Aldridge, Business Coach?
“The smart and quirky advisor who gets sh!t done in business.” Back independent since 2019.
Since April 2006, I’ve been an international business advisor providing bespoke solutions for privately-owned businesses with 12-96 employees.
At this stage you have proven your business model, but you’re struggling to turn aspirations into day-to-day reality. You are still responsible for all 28 areas of your business, but you don’t have the time or budget to hire 28 different experts.
You need 1 person you can trust who can show you how everything in your business is connected, and which areas to prioritise first.
Welcome to Blackboard Friday’s. Got a combination of topics coming together to focus this week on how to be bigger in your business. A few weeks ago, we talked about what business strategy was. The ordered priorities and roadmap to take you from where you are now to where you want to get to. That journey is a combination of reducing and efficiencies, being better, and growing the capacity of your business, being bigger. Step-by-step you take that journey to your vision.
Two weeks ago, we talked about how to calculate the capacity engine in your business. How much revenue could you be generating and is there any waste? Last week, we focused on that waste. We focused on six categories that you could address to identify whether they are holding back revenue and profitability in your existing business. But the reality is, at some point your team are going to be efficient enough. You’re going to want to grow. Similarly, we have six categories for you as a business owner to focus on when it comes to growing the size of your capacity engine, when it comes to building a business that can output even more revenue month after month. Let’s run through them.
The first is more people. This is the obvious one. When I talk to most business owners about growth, this is the one they go to. I need to hire more people. I recently worked with a trade business on their recruitment strategy. They had an awful lot of things efficiencies working well in particular their marketing and their sales. They couldn’t keep up with the work that they were struggling to recruit the right people to come in with the right skills to hit the ground running. So, we pulled together a recruitment strategy that included their onboarding process as well as how they were marketing and advertising to their channels and to their database to get better candidates through the door on a consistent basis. A lot of businesses I talk to don’t want more people—they’re hesitant to grow because they’re worried that that just means more headache. The good news if that’s you, are that five other ways you can grow the business without necessarily needing to add more people.
The next is more products. Great example of this was a client I worked with. They were doing some online software development for clients, and they found that their clients kept asking them to put together the courses, to help structure the programs, not just build the software to support it. They’re now two separate businesses, each of which is bigger than the initial business. That’s because they listen to their market and identify the product opportunity.
As a rule of thumb, additional products that you add to your business will be more profitable because they’re built-in response to an actual need and leverage a brand your existing brand that is already out there with the reputation in the marketplace. If you’ve got some great product ideas that your clients are clamoring for, this is a fantastic way to grow without needing to add more people because you can sell those same products through your existing team to your existing clients.
The flipside of that is more channels. So rather than building more products, where you sell more products into existing clients, you now have more channels to sell your existing products through. One of the wonderful ways you can do this in many professional services businesses is building referral channels, unpaid sales teams that are out there sending your clients on a regular basis. But to give you an idea, of one of my clients in the focus they had on their channels, they realized that every single one of their bad clients came from a single source. We broke down all their clients by channel and we identified that this one source was sending them terrible clients, and those terrible clients were referring even more clients. By reducing the number of channels, they were able to increase their average client size by 30%, which meant that their team were doing bigger jobs and outputting more revenue on average.
Pricing and packaging. This is a great way to increase the revenue outs what your team can generate again without needing more people. If you just put your prices up by a hundred percent, you would double the size of your engine. You might lose a few clients and so it’s important to get the pricing and packaging done well. One of my clients put together a subscription package for their clients. The prices went up by between 20 and 50 percent for their clients, but because they managed to package it in a successful way and break it down into bite-sized monthly lump, so the client felt they were getting more value, they were able to increase all that revenue, again without needing more team more bodies more headaches.
When was the last time you put your prices up? And are your clients buying a package that they feel is tailored to them or they just buying the one thing that you offer them? With the last two, we start to get into some strategies that fewer businesses deal with. But where there can be massive uplift and opportunity, if you decide this is the way you’re going to grow your enterprise.
Client base management—analyzing your clients. You possibly heard of the Pareto principle that says that 80% of your outcomes come from 20% of your input. This is true in a lot of businesses when I’ve done this analysis, 80% of their profit comes from their top 20% of clients. Let me tell you one case study, which is a client where we did this and discovered that 90 percent of their profit came from just their top 10 clients. In other words, if they sacked 90 percent of their clients, they would make almost as much profit. That’s before they even got rid of some of the team that were no longer needed. Now that wasn’t the strategy they went through, but as part of that analysis, we did identify 50 percent of their client work that was losing the money. We wrapped that bundle up in love and we sent it on its way to a smaller competitor down the road who was perfectly positioned to support those clients. Great for the competitor but great for my client as well because suddenly their team had all this spare capacity to deal with the bigger, more profitable clients. That didn’t require any level of recruitment.
The last one so I call new paradigm, and this is starting to get into the real deep belief structures that you as a business owner have about the potential and opportunity for your business. When you analyze the limiting beliefs that may be holding you back and you dig down underneath those to discover that you genuinely do choose and create the whole of your own reality, then you can set business goals that will far exceed what may be those little voices of doubt deep down are telling you are capable.
My last example of today is a financial client that I worked with a few years ago. This was the process that they went through with some specialists in that area. Instead of being a financial specialist in the one market that they were, they’re now a global business. They’re selling services into twelve different countries, and they’re not just selling financial services anymore, they’ve got a whole suite of products. They’ve kicked off an awful lot of those growth strategies and it all came back to them realizing that the only thing holding back their potential was themselves.
Now, when I look the six different categories of ways that your business can be better and the six ways that you could be bigger. As you’ve heard I’ve worked with client businesses in each of those. So, when I go into a business to do a strategic workshop, these are some of the conversations that I want to be having with you, with the business owners. There are some specialists out there that focus on one or two of these in general. So, if you know specifically what you’re looking for, go out there and find the right person to help you to release that. What you’ll find is the growth from where you are now to where you want to be happened a whole lot sooner because you’ve made the decision to be better, to be bigger, and to be both.
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