November 23, 2017
The Ultimate Cheat Sheet on Growing Your Business
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On December 22, 2017, The Tax Cuts and Jobs Act was signed into law. The information in this article predates the tax reform legislation and may not apply to tax returns starting in the 2018 tax year. You may wish to speak to your tax advisor about the latest tax law. This publication is provided for your convenience and does not constitute legal advice. This publication is protected by copyright.
Every business must have a constant eye on growth. If your company is not growing, it is losing key opportunities and longevity. Yet, growth does not always come from increased sales. In many cases, it's important to take an inside look at how you are operating, what costs you have, and how you can better manage day-to-day operations. To stimulate growth in your business – no matter the sector – focus in on these key areas specifically. It could mean improving your company's ability to compete at a higher level.
Using KPIs to Guide Growth and Budgeting
Key Performance Indicators (KPIs) help you know how your company is performing. They should be used as a compass and guiding point for every decision you make within the company. KPIs such as profit, cost, sales by region, customer lifetime value, and product defects are just some of the areas to focus on. To achieve clarity here, you need an efficient way of managing all of this data. Cloud computing makes it possible along with implemented automation. These metrics can provide you with key opportunities for:
Real-Time Cloud Accounting and Improving the Books
A good place to focus attention is on your accounting. Here's what to look for:
Social proof and reviews are insights into what your customers are thinking, expecting, and desiring. They provide an opportunity for you to get more info on what your customers want. Social proof indicates that someone "says" your product or service is good. That means other people are going to flock toward this. Learn what reviews are out there. Amplify your marketing to focus on them. Build strong customer relationships through this process.
Shoring Up Cash Flow by Reducing Costs and Boosting Efficiency
Next, take a look at your efficiency. Using your KPIs, you can provide more insight into key areas of cost. For example, spend the time examining the various costs your company has and work to reduce them. Then, find more efficient methods to improve production, employee productivity, and customer service.
Extend Market Reach by Honing in on Your Target Market or Expand Your Reach
Establish who is your target market. Instead of marketing to the masses, reach people where they are. For example, if you are targeting Millennials as your ideal client, marketing on social media and connecting digitally is essential. For seniors, television and local ads still reign as ideal.
At the same time, consider the value and potential possible if you expand into other markets. Carefully consider other markets that fit your product perhaps in a different way. For example, if you are marketing just to Millennials right now, consider how your product or service could impact the up and coming younger generation. Do you need to make modifications? Should you use different marketing to capture the early lead in this generation?
Provide More Services to Existing Customers
Expand through your existing customers. Perhaps one of the best ways for today's company to increase sales without having to expand on services or customer acquisition costs is to focus on increasing sales to existing customers. What else can you offer? There are several solutions here:
Understand Which Products Are "Losers" and Should Go
Do you have "loser" products? These are products that never really capture enough sales to make them a profit point for you. It's important to target these products with careful insight. To grow your business's bottom line, you need to know how effective every product is. Are you putting a lot of money into marketing a product that only has a very limited customer base? Does it yield a very small profit margin? Determine if you have these products in your lineup and then work to eliminate them, improve them, make them less expensive, or pull at least some of your marketing and labor hours away from them.
Get Better Control Over Employee Costs and Reduce Turnover
How much do you spend on managing your employees? From payroll to taxes to human resources, there are many costs that go into managing your employees. Reducing those costs is always a good thing. Automation and software can help you to reduce your human resource department to create massive savings that you could put toward scaling. The key here is to ensure you are using the most up-to-date resources and tools available.
Alongside this is the goal to reduce employee turnover. Don't create a bad experience for your employees. Provide them with support. Be sure they have constant guidance and the ability to achieve your company's goals. Retaining employees is essential. It costs much more to have to find, hire, train, and manage new employees than it does to keep well-performing, talented, or employees with potential on staff. Find that balance within your HR department for the best results.
Improve Customer Retention to Reduce Costs
It's hard (and expensive) work to get new customers. Every dollar you spend on marketing and bringing in new customers and clients needs to be money well spent. While you cannot stop marketing, you should do what you can to improve customer retention. To do this, consider:
Get a Clear Picture of Profit Margins of All Products and Services
How much does each product cost to make, buy, produce, market, and sell? Every service needs a clear understanding of the costs to acquire and provide that service to your customer base. These costs will change over time, especially as many companies see significant changes in production and logistics costs. You'll need a method for monitoring these costs on an ongoing basis. That's not always easy. With proper software and accounting tools, you should be able to gain insight into costs in real time or at least over the course of several months. This gives you the ability to know where to move prices, where to place your marketing dollars, and where to focus your efforts to scale your business.
What Steps Can You Take Now?
Business growth is always necessary, but there are many ways for your company to expand. Don't always focus on just increasing sales and growing locations. Also look at ways to monitor the financials within your company. This will give you more leverage and power to achieve more of what you want long term.
Using KPIs to Guide Growth and Budgeting
Key Performance Indicators (KPIs) help you know how your company is performing. They should be used as a compass and guiding point for every decision you make within the company. KPIs such as profit, cost, sales by region, customer lifetime value, and product defects are just some of the areas to focus on. To achieve clarity here, you need an efficient way of managing all of this data. Cloud computing makes it possible along with implemented automation. These metrics can provide you with key opportunities for:
- Growth
- Cost-cutting
- Better employee management
- Better customer management
- Scaling limitations and much more
Real-Time Cloud Accounting and Improving the Books
A good place to focus attention is on your accounting. Here's what to look for:
- Are you in the cloud yet? This provides the most effective and efficient way to manage your business's books.
- Real-time access means you can pull up reports and profit margins to get a clear understanding of opportunities.
- Put more attention into accuracy and bottom lines. If you are not working with a professional service to improve your accounting clarity, what every dollar means, it is time to do so.
Social proof and reviews are insights into what your customers are thinking, expecting, and desiring. They provide an opportunity for you to get more info on what your customers want. Social proof indicates that someone "says" your product or service is good. That means other people are going to flock toward this. Learn what reviews are out there. Amplify your marketing to focus on them. Build strong customer relationships through this process.
Shoring Up Cash Flow by Reducing Costs and Boosting Efficiency
Next, take a look at your efficiency. Using your KPIs, you can provide more insight into key areas of cost. For example, spend the time examining the various costs your company has and work to reduce them. Then, find more efficient methods to improve production, employee productivity, and customer service.
Extend Market Reach by Honing in on Your Target Market or Expand Your Reach
Establish who is your target market. Instead of marketing to the masses, reach people where they are. For example, if you are targeting Millennials as your ideal client, marketing on social media and connecting digitally is essential. For seniors, television and local ads still reign as ideal.
At the same time, consider the value and potential possible if you expand into other markets. Carefully consider other markets that fit your product perhaps in a different way. For example, if you are marketing just to Millennials right now, consider how your product or service could impact the up and coming younger generation. Do you need to make modifications? Should you use different marketing to capture the early lead in this generation?
Provide More Services to Existing Customers
Expand through your existing customers. Perhaps one of the best ways for today's company to increase sales without having to expand on services or customer acquisition costs is to focus on increasing sales to existing customers. What else can you offer? There are several solutions here:
- Offer more products and services you already provide to existing customers. For example, introduce them to a secondary service you provide that they have yet to purchase.
- Build relationships with complementary service providers and market those services to your existing customers.
- Build on your existing products and services to provide more comprehensive options. Grow the company by expanding what you offer.
Understand Which Products Are "Losers" and Should Go
Do you have "loser" products? These are products that never really capture enough sales to make them a profit point for you. It's important to target these products with careful insight. To grow your business's bottom line, you need to know how effective every product is. Are you putting a lot of money into marketing a product that only has a very limited customer base? Does it yield a very small profit margin? Determine if you have these products in your lineup and then work to eliminate them, improve them, make them less expensive, or pull at least some of your marketing and labor hours away from them.
Get Better Control Over Employee Costs and Reduce Turnover
How much do you spend on managing your employees? From payroll to taxes to human resources, there are many costs that go into managing your employees. Reducing those costs is always a good thing. Automation and software can help you to reduce your human resource department to create massive savings that you could put toward scaling. The key here is to ensure you are using the most up-to-date resources and tools available.
Alongside this is the goal to reduce employee turnover. Don't create a bad experience for your employees. Provide them with support. Be sure they have constant guidance and the ability to achieve your company's goals. Retaining employees is essential. It costs much more to have to find, hire, train, and manage new employees than it does to keep well-performing, talented, or employees with potential on staff. Find that balance within your HR department for the best results.
Improve Customer Retention to Reduce Costs
It's hard (and expensive) work to get new customers. Every dollar you spend on marketing and bringing in new customers and clients needs to be money well spent. While you cannot stop marketing, you should do what you can to improve customer retention. To do this, consider:
- Speak to customers one-on-one to ensure they are satisfied.
- Ask for feedback and respond to it routinely.
- Meet with customers to gather more insight. Conduct market research routinely.
Get a Clear Picture of Profit Margins of All Products and Services
How much does each product cost to make, buy, produce, market, and sell? Every service needs a clear understanding of the costs to acquire and provide that service to your customer base. These costs will change over time, especially as many companies see significant changes in production and logistics costs. You'll need a method for monitoring these costs on an ongoing basis. That's not always easy. With proper software and accounting tools, you should be able to gain insight into costs in real time or at least over the course of several months. This gives you the ability to know where to move prices, where to place your marketing dollars, and where to focus your efforts to scale your business.
What Steps Can You Take Now?
Business growth is always necessary, but there are many ways for your company to expand. Don't always focus on just increasing sales and growing locations. Also look at ways to monitor the financials within your company. This will give you more leverage and power to achieve more of what you want long term.
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