Did You Know There are Just Four Ways to Grow Your Business?

It’s true. There are 4 fundamental ways to grow your business:

1. Increase the number of customers (of the type you want)
2. Increase the transaction frequency
3. Increase the transaction value or 'average sale'
4. Increase the effectiveness of each process in 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 find it very probably 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 help you to actually grow your business.

If you're like most business owners your primary focus will be on the first way to grow your business - winning new customers. You may have often thought "I need more leads," "I've got to get more inquiries," or "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.

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.

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

This may seem pretty obvious. 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. The team at Vista/BMO 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 raising prices to the average business person, s/he thinks you're crazy, but there are specific, workable strategies to make this happen.

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 but rather needs to convert more of the ones they're already receiving! That's a sales process that needs improving.

The truth is that most people don't see their businesses as a series of processes. But that's exactly what they are, so we'll look at exactly what results your current processes are generating and see if we can't improve those!