There isn’t a small to medium sized business that isn’t looking to manageably scale and grow their business. Yet growing a business can be difficult for many companies. If nothing else, attempting to work on the business whilst you’re working in it, is exhausting. However, we have three fail-safe ideas which we always tell our clients to follow if they want to start making meaningful differences in growing their company.
Simple Business Growth Ideas for SMEs
Put Your Prices Up!
The majority of clients rarely think to put their prices up, or worse — feel like they can’t. However, everyone else is putting their prices up; so of course, you must also. Price is often tied up with concern over a. worth or b. demand. The truth is, if people want your product or service, they will pay for it. If you are competitive and professional, why shouldn’t you expect to charge the correct price?
Undervaluing and underselling a product or service is not only detrimental to our mental states as we start to believe our worth is akin to the charge amount, but also terrible for our industries. Repeatedly I witness horrifically low hourly rates on agency sites. Not only are these personally unsustainable, but it devalues the sector as a whole. At some point, the people who are initially selling their work for such low rates have to put their costs up to survive, then guess what? Clients will look for the cheaper option – pushing these guys out of the sector as they can no longer afford to remain with these sorts of clients. Very simply, cost your work properly and charge what is required to offer a first-class service or product, the right people or companies will pay for the best. It is these clients or customers you should be looking to align your company alongside.
How to easily raise your prices
Try answering these questions:
- Are you charging enough?
- How do you measure your profit margin on each sale you make?
- What does a 5% increase in sale price do to your profit margin?
Now try two simple exercises:
- Look at all your services and simply add £50 to them. What does that increase look like? What difference does that make?
- Now consider your clients: if you have 10 clients bringing in £1,000 per month each, put £50 on each (5% increase). What would £500 extra per month mean to you? See how much more you can earn by adding a slightly greater increase.
Sort out your sales and marketing!
Yup, if no one knows you exist how do you expect to sell anything? Marketing is essential for bringing in new leads to convert into clients or customers.
Have you ever considered how many new clients or customers you actually need to earn the money you’re looking to achieve?
Marketing consultant and founder of Sasa.Marketing, Cat Bowyer, offers three genuinely helpful pieces of advice to companies looking to get better noticed:
A. Do you really know who your customer is?
- Do you know their motives?
- What are their communication channels?
- What concerns do they have?
- What size are their budgets?
Understanding your customer will ensure you’re investing your marketing spend in the right places.
B. Make sure your marketing objectives reflect your business objectives. Are you looking to achieve growth through new customers, or growth through increased sales per customer? What about your profit margin and sales relationship? Do you have a high margin and low sales or a low margin but high sales?
C. Websites and social media content are great, but you still need to let people know you’re online. Otherwise it’s like having a box of leaflets under the desk. Make sure there’s a mix of campaign and brand awareness activity.
From a bookkeeper’s perspective we look at the figures involved in marketing from a time and value ratio.
- Do you know your conversion rates? (The conversion rate is the percentage of new leads who take a desired action and become paying customer.)
- How many leads do you need to generate, so they eventually convert into the desired number of clients or customers?
For example, conversion rate of new leads to paying customers is 5% and you would love to gain two new clients in a month. How many leads do you need to generate? The answer is 40 new leads, which at 5% conversion rate will secure you two new clients.
Marketing is a numbers game! The more people you attract, the more customers or clients you’ll retain! The greater your marketing efforts, the greater your gain.
To improve capacity, it is essential your organisation runs efficiently. Rather than taking on more costly staff members, place in better systems and processes that actually work to reduce labour time in all departments.
- Train your current work force with your new systemisation to effectively utilise your current team, before looking to employ more staff to cope with an increase in demand.
- To systemise your organisation, you will need a plan. It’s essential you understand your figures and have a visualisation of the profit you require to achieve the kind of growth you’re looking to make. If the figures and goals aren’t attainable or tangible, how do you expect to get great results?
- To get an idea of how to create a financial model and plan that will work for you, read our article: Financial Clarity – How To Sleep At Night.
Business growth doesn’t have to be confusing:
- Create a plan
- Put your prices up
- Market yourself
- Improve your efficiency.
However, if you want to chat through these ideas or look at figures you can achieve with a professional bookkeeper, get in touch! Call 01206 700 252 or email email@example.com