Even though I’ve been a small business owner since 2009, I readily admit that I do not know everything. Whenever I have a question about anything related to operating or growing a small business, I call one person: Talmar Anderson.
Talmar is also a small business owner, but she specializes in telling other small business owners what to do. Kidding! But not really. Her focus is on helping small business owners navigate through a transitional growth period, like when they want to move from being a solopreneur to hiring, scaling, and accelerating growth.
Because I always learn so much from her when we talk, I figured I’d share some of her words of wisdom with you. Here are Talmar’s six proven ways to grow your small business:
The very first thing a business owner needs to do if they want to grow (regardless of size) is document everything. Get everything out of your head and get it written down, starting with how to do the actual work and operate the business, who’s responsible for doing it, how to deal with problems, etc.
Once there is documentation on how to run your business, you can focus on real growth – understanding revenue sources, referral sources, market opportunities, etc.
Understand what your clients want to buy, NOT what you want to sell
You might have a great idea, but if your prospects or clients don’t need it or don’t see the value in it, they will not buy. Always ask, “What does the client NEED?” Create products and services around that need.
Price your services based on your experience
If you’re working on a billable hourly rate, you can’t grow. You need to either increase your hourly rate or price by the project – both of which you can do. Here’s the thing: As you gain experience, you are bringing more knowledge and more value to the table. You are working smarter and better now than you were five years ago – your prices have to reflect that.
You also need to understand what’s going into your pricing model. High touch/high value engagements costs more (and that’s where you want to focus your efforts), but a low touch/low cost service acts as an entry point for new clients. They can try your service and then move up the ladder to the more valuable one.
Make sure your marketing leads to sales
In other words, don’t throw money out the window. Make sure your marketing leads to a real sales process. And measure it – measure, measure, measure! Have a defined goal and measure your progress. Are you getting qualified leads? Are enough of those leads turning into sales to justify your marketing spend?
Put a real sales process in place
I see a lot of B2B businesses miss sales opportunities because they don’t have a sales process in place. You might have a great proposal but then you’re horrible at followup, or you might give a great presentation but then fumble the sales conversation.
Where can you improve the process so your conversion rate goes up and you more quickly and easily convert those qualified leads into business? Think about what you will say during the sales conversation. What are all of the objections a prospect is likely to have? How can you answer those objections?
Get a handle on all of your business’s numbers
In business, we measure success through profitability – not sales and not revenue. How much money are you keeping after you pay your expenses? Real growth happens once you understand your profitability.
You have to look at your profit and loss (P&L) statements and your balance sheet – what liabilities do you have, what assets can you be using? By having this information – P&L, balance sheet, profitability – in front of you, you have a lot of power.
Look for trends, and you’ll be able to prepare for growth. You might notice that in certain seasons, your sales go down and your profits follow suit because you have fixed expenses you have to pay. This is when you cut spending and defer investments.
Conversely, you might know that you always have extra cash on hand at the end of March due to strong sales during the first quarter. Invest in infrastructure, a new strategic partnerships or marketing campaign to drive growth at this time.
If you don’t know how and when you make your money, you could spend money at the wrong time and take a significant hit to your finances. However, the more you know, the more confident you will be and the smarter growth decisions you can make.
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