We talked to serial entrepreneur, Andy Angelos, about what he did to grow his business (Social Katy) and, eventually, sell it to a larger competitor. This post is an excerpt from our new course, 12-Month Business Growth Strategy.
Your business growth plan depends on pulling one of three levers and, just like any other lever that you’ve ever pulled, that means something has to change: the way that you do something; the way that your customers interact with you; the way that you interact with the stakeholder around your business. These things are going to change based on the decisions you make.
Let’s dive into business levers and their implications.
- Increasing the Number of Transactions and Sales Operations
You’re going to be selling more of whatever you’ve sold in the past. The thing you need to think about is how you are going to get those new customers. So, this is an acquisition discussion.
You want to build something that is scalable and sustainable and doesn’t consume all of your time, but will bring in new business for you.
This might mean building a sales team and hiring sales reps or even ramping up email marketing to prospective buyers and focusing on growing your email lists. You want to think about the funnel you are putting your leads into and pay attention to those conversion rates at each step of the funnel as you lead your list members to a purchase.
This allows you to understand how many outbound contacts you need on the front end (like the activities of your sales reps) are required for x amount of sales or new clients.
There are still some uncertainties you have to deal with even with a funnel, but it should be reliable enough for spurring growth.
You’ll also need to determine whether the tasks required to increase volume of transactions is something that is your responsibility or the responsibility of a more experienced employee or contractor. Thinking about your core competencies can help make this decision.
- Market Testing when Raising Prices
Raising prices can be a learning curve but can be one of the easiest levers to pull. Oftentimes, companies don’t want to be rejected so they keep their prices low.
The problem with this is that having some customers that pay a low price doesn’t mean you have a business if the money your revenue isn’t covering your costs. Customers that pay low prices can also be big headaches, requiring lots of hands-on customer service that wouldn’t be necessary with a higher quality audience.
Raising prices is something that many are hesitant to do especially if you are already able to sell your product at a low price, but one of the most drastic changes you can make with your business is doing the same thing for more money.
Successfully changing prices is all about testing. Make different level changes in your pricing and measure your target market’s response to those changes. Do they even notice? Do they object and stop buying?
Sometimes, a change in price will work with one customer set but not another. You should adjust accordingly.
- Find Cost Efficiencies
After you experiment with higher volume sales and price changes, it’s a good exercise to see how you can reduce the expenditures required to sell your product or service without diminishing the quality.
This should be your last lever to pull and experiment with.