6 Key Areas of Business Advice in 21st Century Part Two – Only 4 Ways to Grow a Business

We believe that 80% of straightforward, no nonsense, strategic advice can be summed up in just 6 Key Areas of Business Advice.

In Part 2 of this 6 part series of blogs – we are asking the question – what’s your growth focus? – because there are “Only 4 Ways to Grow a Business”.

This involves some logical thinking: First you need to understand the math:

Revenue is comprised of 3 elements – in every business

1. Number of Customers – on average in any given period
2. Number of Transactions – on average per customer in the same period
3. Average $ Value or Price – per average transaction in the same period

It is a mathematical fact that (for any business in any given period) their Total Revenue = 1 x 2 x 3

If you can’t grow revenue and you want to Grow Profits, then the only alternative way to achieve that is to Reduce Costs. To do that means you either have to improve the gross margin by taking out cost (at delivery) or reduce overheads. Either way you have to Get More Efficient.

Consequently the only way to Grow Your Business:

1. Win New Customers – of the “right type”
2. More Transactions – with the average customer
3. Increase Average $ Value – per average transaction
4. Increase Efficiency – reduce costs

Rank your strategic growth focus in priority order

It’s a good strategic discipline for business owners to decide – where it would be easiest to grow – and then rank the above in 1-2-3-4 order of priority.

Focus on the HOW? Create a Plan

1. Planning Focus – Win New Customers

You can only achieve this in 2 ways:

• Organic Approach – to win new customers
• Business Acquisition – to “buy new customers”

Generally the answer for most businesses will be organic approach – in which case your key focal points of the plan will be:

• Targets – who are the “right type”? Properly define.
• Value Proposition – what do we say? Consistently demonstrate.
• Reach – how will we approach them? Marketing “tool bag”
• Evaluation – how we make it easy to evaluate us and close the sale. 

2. Planning Focus – More Transactions

You can achieve this in a few ways to include:

• Internal Focus
  • Customer Service Process – to increase transactions
  • Develop New Products / Services – to increase services available
• Business Acquisition – to “buy new products”

Generally the answer for most businesses will be to really concentrate on the customer service process (unless they happen to be already developing new products or services) – in which case the key focal points of the plan will be:

• Relationships – how do we use to maximize transactions with customers?
• Processes – what is our standard process to “up-sell” and “x-sell”?

3. Planning Focus – Increase Average $ Value

You can achieve this in a few ways to include:

• Price Increase
• Up-Selling Services

Generally the answer for most businesses will be to really concentrate on up-selling services  – in which case the key focal points of the plan will be:

• Processes – what is our standard process to “up-sell” and “x-sell”?
• Separation – have we properly defined and separated services (see Key Area of Business Advice #1 and Blog 1)

4. Planning Focus – Increase Efficiency

You can achieve this by focusing on the 7 Business Wastes – which are covered in detail in Key Area of Business Advice # 3 and Blog 3

By following a logical approach to strategic growth planning – and understanding that there are Only 4 Ways to Grow a Business you can dramatically increase your chances of Maximizing Business Potential.

© 2019 HaydenRock Solutions, LLC