Growing your small business should be one of your primary goals, especially early in your business’s lifecycle. Understanding how to do that requires a plan — it’s hard to make growth happen without a plan. It needs to be more than a philosophical goal.
Let’s start from the beginning of how you can plan for growth.
Set clear goals for business growth
We already mentioned this, but the first step in any growth planning process for small business is to set clear and achievable goals. These goals should be specific, measurable, and time-bound. The easiest length of time? Let’s use a year. Consider setting goals for various aspects of your business, such as the number of customers, revenue increase, or market share percentage. For instance, you might aim to grow your business by $500,000 in the next year.
That’s a solid number to use, but you’ll have to reverse engineer how to get there. That’s where the plans come in.
Create a plan for growth
It’s true that business growth NEEDS a plan to work. To reach your growth goals, you’ll need to start with leads coming in the front door. So let’s start with the front end: how do you plan to attract new business? Consider the following steps:
Determine the Number of Leads Needed
First, you need to know your average revenue per new client or customer. Let's say that it is just over $8,000. You will want to acquire 60 new clients to achieve $500,000 in growth. Then, you will need to factor in your closing percentage, which let’s say is 20%. This means you'll need 300 leads to close on those 60 clients.
Start by analyzing your current lead generation efforts. Where are they at now? How much do you need to increase? Is it realistic to think that with your current lead sources that these 300 leads might show up? We’re guessing not. Here’s where to go next.
Assess Your Current Lead Sources
Take a close look at your existing lead sources. Are they reliable and consistent? Conduct a SWOT analysis to identify environmental factors that might affect these sources, such as industry regulations or market trends. Even more than that, look at your books and see what stories they tell. Understanding these lead sources (and being honest with yourself about them) will help with these next steps.
Explore Diverse Lead Acquisition Strategies
To reach your goal of 300 leads, you'll likely need to diversify your lead acquisition strategies. Consider:
Marketing: You sometimes have to spend money to make money. Invest in digital marketing, including paid ads and local SEO, to attract more potential leads online. After you have a baseline for how much it costs to acquire a lead (Is it $400? $1,000?), it simply becomes a numbers game on how much to invest to get the return you need.
Channel Partnerships:Collaborate with other businesses that serve the same customer base. This can include software providers, point-of-sale (POS) companies, coaching firms, and more. Having these channel partnerships opens up your business to new (to you) revenue streams while also aligning you with a partner that these leads already trust. If you have a business that you frequently work with, especially that shares its goals, it’s definitely valuable to explore these channel partnerships.
Referral Programs: If past referrals have been successful, continue nurturing these relationships and exploring ways to encourage more referrals. That could include giving discounts based on referrals or simply letting your existing clients know how much word of mouth can mean to your bottom line.
Consider Acquisition as a Growth Strategy
If your business is well-positioned and you have the necessary resources, consider acquiring another business to accelerate growth. Acquisitions can provide instant access to new customers, products, or markets. They’ll give you a ready list of new clients, but can also potentially lead to culture shock if your business operates significantly differently than the business you acquired. That’s why it’s so important to make sure your culture, clientele, and numbers ALL match before considering this strategy – which is EXTREMELY effective when done right.
Another benefit of an acquisition or merger as a growth strategy: oftentimes, it comes with staff. We all know staffing is an issue right now, so consider that an added benefit of this growth strategy.
In review: Assess Resources and Capacities for growth
Before starting your growth plan, assess whether you have the resources and personnel to support it. Again, be honest with yourself. As you execute these plans, consider the following:
Sales Budget: Determine the budget required for your sales and marketing efforts.
Milestones: Break down your growth goal into smaller milestones, including lead generation targets and revenue projections.
Cost of Lead Acquisition: Calculate the cost associated with acquiring each lead through different channels.
Team Capacity: Assess whether your sales and marketing teams have the capacity to handle the increased workload.
Successful small business growth planning for the end of the year requires setting clear goals, developing a strategic plan, and ensuring you have the resources to execute that plan. We’ll talk in the coming weeks about staffing strategies and other elements, but this first step is crucial for your growth.
By following these steps and being adaptable, you can position your business for growth and success in the coming year. Remember, growth is not just about setting goals but also about having a well-thought-out roadmap to achieve them.
It can be overwhelming, but YOU GOT THIS! Need help? We’re happy to talk!