08/14/2018 – By Jason Smale
A common misconception business owners have when it comes to accelerating the profitability of their business is that by simply increasing the number of customers they serve, they’ll increase their profitability. In fact, accelerating the profitability of a business and structuring sustainable growth goes well beyond simply increasing the number of customers you serve.
Below we’ll discuss the keys to establishing a strong, competitive model that will deliver accelerated profits and sustainable growth.
Evaluate growing market trends
You’ll need to take some time to research the growing trends within your competitive market-space. This includes taking a look at the current and growing trends in customer demands, any political(policy), supplier, technology, and any competitor-oriented shifts within your market-space.
Evaluating the growing market trends will allow you to know what competitive forces you are dealing with, as well as present you with a clearer understanding of what opportunities are emerging in your market space, and what offerings you may be presenting that will no longer benefit your business.
Evaluate current offerings and cost structure
Now let’s look for opportunities to cut offerings from your sales program that provide low-margin returns. Be careful when considering these cuts. If the offering is time-consuming or takes heavy financial investments while providing little return, cut it from the program. However, if it is a low cost, low time investment offering that generates opportunities for upsells to other more profitable offerings, consider keeping it and evaluating solutions to cut costs associated with this offering, or packaging it with other higher margin offerings to offset the low return.
From there, it is important that you evaluate the cost structure of your business. Align your investment in both fixed and variable costs within the business to your business model. If you are a low-cost service provider, flying first class or taking clients out for dinner meetings wouldn’t fit with your competitive model and will negatively affect the profitability of your business.
Maximize the resources available to your business
We often hear how business owners wear many hats within a growing business, but this could be said of some employees too. Instead of hiring a number of part-time employees or outsourcing different duties, try taking a moment to speak with your staff, find out what they’re passionate about, look at their previous work experience, see if there is an opportunity to leverage their passions and experience for multiple roles within the business. By feeding their passions and giving them greater purpose, you will find you can retain talent longer and cut down on training costs associated with high turnover rates.
Capitalize on low-cost, high return marketing strategies
Some business owners put their focus on making a big impact in a short period of time and spending far too much for big advertisements with limited results. Signing up to get your ad on buses, billboards, etc. may be good at getting your name out there, but may not be the most ideal strategy to use for growth.
Online marketing has come along way in recent years. You can get far greater reach and impact for a much lower cost. By inputting the insights you’ve already defined about your ideal customer into the campaign, you can deliver your offerings direct to the customers you intend to speak to with each ad. With the right features built into your campaign, you can also extract greater insights into those customers engaging with your ads online.
Online advertising also offers you greater control over the customers’ purchasing journey. By putting ads out that initially grab the customers’ attention, and then retargeting those that have engaged with your initial ad with more ads that drive them closer to a purchasing decision, you can create what is referred to as advertising funnels. You can accomplish all of this for a much lower-cost than you can on any other medium, creating opportunities for you to put ads in front of the right customers for a lower price and, in return, drive greater profitability.
Define a clear growth agenda
Once you have a clear understanding of the trends emerging in your market, the offerings you’ll present in response to these growing trends, and you’ve optimized the cost structure of your business, it’s time to write your growth agenda.
The growth agenda identifies market opportunities you intend to capitalize on and those which you will not. It lends credibility to existing vision statements within your company, or it can establish the framework for new vision statements to be created. Most importantly, keep this plan simple, focusing on no more than 3 to 4 growth opportunities at any given time.
Once you’re done crafting your growth agenda, and outlining your intended sales targets you can begin pouring fuel on the fire by targeting your ideal customers through optimized, cost-effective marketing solutions online. Don’t limit yourself to online advertising, but definitely learn to leverage this strategy.
Establish flexibility within the framework of your business
Finally, make sure that you remain flexible, both in your vision for the future, as well as with the resources your company uses, from suppliers, markets you compete in, to how offerings are presented to clients (through brick and mortar shops, or online). The more flexible you remain, the higher the probability for your success. Business owners who know when to pivot and create room in their business model to do so, are far more likely to succeed than those who do not.
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