We like to think about growth as a positive thing. We get this idea in our heads that we have to grow. We set our sights on some arbitrary target and do what we’re supposed to do. However, growth also comes with a certain amount of risk. On today’s podcast, Stephen Krausse talks about what it means for small business owners when we talk about growth. What happens when we get there and what we’re doing turns out to be uninteresting or isn’t consistent with what we wanted as a small business owner? If you’re a small business owner, find out on today’s show if you really need to grow.
Listen to the Podcast here:
Does Your Small Business Really Need To Grow? | Up And To The Right | Episode 032
When you stop growing, you start dying. That’s attributed to William Burroughs. This is something we hear about in small business and in business in general that if we’re not growing, we’re dying and there’s some catastrophe going on. I wanted to talk a little bit about what it means for small business owners when we talk about growth. We like to think about growth as a positive thing but it also comes with a certain amount of risk. With a certain amount of thought, we can use this topic to our advantage. We get this idea in our head that we have to grow, we set our sights on some arbitrary target and do what we’re “supposed to do.” What happens when we get there and what we’re doing turns out to be uninteresting or isn’t consistent with what we wanted as a small business owner? We ended up rationalizing our discomfort with things like, “That’s the way business is. That’s what business is like.” My personal favorite, “That’s just part of the job.” It’s time to roll up our sleeves and get to work.
There’s a lot going on in the world. I don’t want to trivialize that, but I’m not going to talk about events that plenty of people out there are doing that. They’re far more qualified than I am. We’re going to sit back and talk about business growth and what it means for small business owners. We’re going to talk about what it means to grow as a small business and get our head around how we can use our sales and marketing strategy to achieve the kind of growth that we want. The principles that we want to focus on are acting with intention and planning. Both of those things will help us achieve results that are more aligned with what we want as business owners than if we run amuck and grow, whatever that means to you.
The heretical question in the first place is, “Do we need to grow?” It might seem like a no-brainer that we need to grow. It’s worth putting some thought into. That’s what we wanted to talk about, what thought do we put into our growth model? What do we do once we have gotten our heads around what we’re thinking about it? How do we go about implementing that in a way that’s meaningful that will help us get to where we want to be? There are a few types of growth but I wanted to throw some out just as food for thought.
There are sales per customer. How many times does a customer buy from you? An easy analogy here is let’s say you’re running a coffee shop and the customer comes in once a week to buy a coffee. How do we get them to come in once a day to buy a coffee instead of once a week? More valuable sales per customer. Like me, your customer comes in and buys black coffee, which is the lowest margin thing that you have. How do you get me to come in and buy a latte or something that has a higher margin? The more customers you have, the more sales you can make. How do we achieve that to get more customers? There’s always growth through acquisition. That can be more difficult for small business owners who don’t have the capital or the financial resources to go after another acquisition of a business, purchasing a business or acquiring a business and then adding revenue streams.
If you’re making and selling coffee and then you go back to, “Let’s sell the syrup that you put in coffee, and let’s put it on a shelf. Let’s sell mugs,” how do you add a revenue stream? Those are some types of growth or some methods to achieving growth. They aren’t all the same thing and they don’t all result in the same outcome for a small business. What we’re going to try to get our head around is how do you use each one of those or others as appropriate for your own business to achieve the goals that you want to achieve as a small business owner? “Where do you want to be?” That’s the question that we have to ask before we start talking about what kind of growth is important or valuable to you as a small business owner?
It is perfectly reasonable not to want a bigger business. If you’re sitting there thinking, “If I don’t grow, my business is going to die.” The natural progression is that your business has to get bigger. That’s what I want to get us to think about. Is that the necessary outcome? If you don’t want a bigger business, if a bigger business doesn’t achieve what you want to achieve as a small business owner, then by all means, let’s not target that. Bigger isn’t always better. Let’s figure out what that means to you and then work to achieve what you want, versus what this random bigger means to everyone else so what we perceive it to mean.
You could have a completely different goal. You could want to work half time or have a goal of having a very profitable business centered around a very select clientele. There are lots of businesses that only do high-end business with select groups of people, and that’s their business model. There’s also the business model of the more the merrier. All of that comes with risk. We’re not going to go into the risks and benefits of each business model. We would have an all-day live stream but there are risks and benefits to each of those business models. That’s part of what needs to be considered as you design your own business future.
That’s the question that you need to answer. Where do you want your business to be? Planning what you want to achieve, how do we get our heads around what that means? We don’t want to get caught up in the need for revenue growth. That’s the only consideration instead of deciding what business we want to be and where we want to be as individuals and business owners at the end of a given period of time. Let’s say we’re planning for the 2020 year. What do we want to be at the end of 2020? What are the tools that we think we need to use to get there? It’s time to start planning. We go through where we want to be.It is perfectly reasonable not to want a bigger business. Bigger isn't always better. Click To Tweet
We think about that and then we say, “Let’s put it into steps.” What is the step-by-step process to get from where your business is to where you want it to be? Planning doesn’t take that long, at least not in the 30,000-foot view. A few hours a day, split it up. There’s a lot of value in putting some notes together and then getting back to them, but it doesn’t take a long time necessarily to put together a cogent plan or an idea of where you want to be at the end of a given year. You can step back and say, “What are the tools we need to get to that point?” Once we took the time, we’re going to find out what we want from our business. It’s time to figure out what tools can be used to get there.
The next step is we’ve got a plan. We figured out what we want to do, where we want to be at the end of a given time period. We have to figure out what tools and what marketing and sales practices are going to get us to that goal. It may just not be marketing and sales. There could be product development that even as a service-based business, you may have to do product development to get your business in a position to achieve the goals that you want by the end of a given period. You may not have a service offering that does what you want or what you think your customer wants. We have to figure out how to do that. You may have to develop a different service model and product. You may need different resources.
Then it’s time to start designing your sales pipeline around achieving the goals that you set for yourself. We know what we want to do by the end of 2020 and we have gone through the steps and the products we think are going to get us there. For example, you’ve got a coffee shop and you want a new revenue stream or you need to bring people in. Instead of buying black coffee like I do, you need them to buy either a larger coffee or a fancier coffee. What if you don’t have a recipe for a fancier coffee? This is for example figuratively, what if your choices are simply black coffee or coffee with cream? If you need to charge twice that for that cup of coffee and you need to provide additional value for that, then you may have to develop that product so that you can offer it and then work towards achieving those goals.
There is potentially work across the entire organization from product development, customer service, to marketing and sales, whether that’s ten people or one person, each of those disciplines has to be addressed as you go forward in order to achieve that result. We designed the sales and marketing pipeline to achieve that by figuring out what tools will promote the products that we want to sell the most, attract the audience that will be interested in those products the most, and also convert our current customers to buying those products.
As you go forward, you have to measure the results and tweak the system as required. In terms of me talking, there’s not a whole lot to talk about in the general sense. That’s all I wanted to cover now is the general idea of, “Do we have to grow in this traditional sense of basically attracting more customers or can we do it in a way that’s more intentional that allows us to gain the growth that will achieve the needs that we have as small business owners?” That’s what is more important than this random number that I’ll be satisfied when the growth is $10 million or $1 million. What if that number doesn’t correlate to what you want as a small business owner?
That’s a general principle. We want to identify where we want to be, decide what growth model is going to achieve that goal and then design our sales pipeline to make that happen, to sell those products or achieve those targets. The practical action for us is to simply sit down and figure out where we want to be, “What does being in business in December of 2020 mean to me as a small business owner?” Stepping back and saying, “What is going to help me get there? What growth tools are going to help me achieve that result? What marketing and sales tools or sales pipeline is going to help that growth occur?” There’s a three-step process, determine where you want to be, what type of growth is going to help you get there, whether that’s product development growth, shifting customer base or changing customer buying habits? What marketing tools are going to be valuable in helping achieve that growth model? Those are the three things that we want to do. I don’t have a whole lot of other stuff to talk about now.
If this was helpful to you, please subscribe to the Beyond 50 Percent YouTube channel. You can hit the bell thing to be notified when we go live and when a new content is updated. If you’re thinking, “What is my growth model need to look like?” You could use some help with that. Please contact us at (970) 218-2018 or [email protected]. If you have any questions or if you’d like to suggest a topic, please go ahead and send those to [email protected]. I’d like to thank you for reading. Stay healthy, stay safe and take care of each other.
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