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If you plan to sell your small business someday, you need to make growth and success a habit, starting now. Over half of the companies I look at each year are barely treading water, with growth rates that have stagnated at 20% or less. Most of these companies are falling behind because they’ve failed to anticipate the cost of customer retention and acquisition as well as the increasing costs of doing business and the rate of inflation.
If the growth rate of your small business is stagnant, give yourself a boost with some flash planning. Start by figuring out what you and your company would have to do to add 25% more customers who will make purchases that equal the median amount of each customer purchase. For example, if your median customer purchase is $1,000 and you currently have 2,000 customers, how would you sell $1,000 dollars of your product to 500 more people this year? If you can do that, your revenues will have increased from $2 million to $2.5 million.
Next, ask yourself how you can increase sales to your current customers by 10% or more. When you have answered your sales question, you must ask your operations question: Now how do I increase my production by 35%?
Plan it out, and set up a list of actionable items to do each day to make this happen. Put your plan in your planner and everyday give yourself a task that you start and complete with tangible, measurable results. Measure your results, and cut yourself no slack. If you can raise your revenue by 35% this year, you may be able to increase your revenues by 50% the following year, and so on. Then, when it comes time to sell your business, you’ll have a growth rate worth talking about.
Marilyn J. Holt, CMC