How to increase revenue and profit monthly at a minimal cost
I have two questions for you. That revenue and profit goal of yours, do you still walk around with it? Are you doing everything but still feel like you are chasing shadows? If your business is struggling to grow revenue and profit, you are not alone. I feel your pain.
The pandemic has been challenging for small businesses. I have been privileged to work closely with dozens of new business owners over the last few months and it has been fascinating to watch, advise and learn more about how to effectively grow business revenue in a pandemic.
I will share 5 strategies to help you quickly grow your business revenue. I will talk about the following:
- Revenue growth 101
- Build self-awareness
- Create a vivid-vision
- Reverse-engineer your vision
- Execute with empathy
Revenue Growth 101
I started my first business in 2013 running a College Pro painting franchise in Manitoba, Canada. This was my big introduction to the world of business. I was lucky I had great coaches and mentors who helped me successfully grow my revenue by about 30% every year. I started with an investment of $1,000 and grew my business to over half a million in revenue in a few short years. One of the things I learned was the 4 primary ways to grow business revenue.
- Raising my price
- Adding new customers
- Getting current customers to come back often
- Getting customers to spend more every time they came back
The strategy you choose to use for your business is determined by the state of your business. For example, if your business is relatively new, then your priority should be adding new customers and then getting them to come back often.
Get your customers to come back often and when they do, provide the right incentive for them to spend more
If your business is already established, it might be cheaper and more efficient to get your existing customers to come back more often and spend more every time.
I used steps 1 and 2 in my first year of business and added steps 2 and 3 after I had a good base of customers I was working with. I did this by offering my clients the option to commit to future projects by giving them an early bird discount or higher priority for when the job would be completed. I also incentivized my customers to spend more by identifying additional work my crew could complete while we were on-site.
Self-awareness is all about understanding the relationship between your feelings and what you think, do and say. If you are highly self-aware, you can objectively evaluate, manage your emotions and align your actions with your values and long-term goals.
Lack of self-awareness will lead to self-sabotaging patterns of behaviours that are by default destined to lead to poor results typically presenting as static or worse, declining revenue and profit.
In Steven Covey’s book 7 Habits of Highly Effective People, Covey explained that self-awareness is the most fundamental paradigm of effectiveness because it helps us to stand apart and examine the way we see ourselves.
Your business depends on you and high self-awareness will help you have a good understanding of your strengths and weaknesses which will help you to leverage your key strengths to the business's core competencies and delegate or find extra support for areas of weakness. As you can see, this will naturally lead to better decision making and help create more authenticity which is reflected in every part of your business.
A good first step to building awareness is to take the MBTI and Enneagram personality tests to get a sense of how you gain energy (introversion or extroversion), how you absorb information (sensing or intuition), how you primarily make decisions (logic or emotions) as well as how you plan and deal with the options you have (prospecting or judging).
Ask yourself the following questions after taking the tests:
- Describe yourself in 3 words
- List 3 of your biggest strengths and weaknesses
- List 3 of your biggest motivators
- List 3 of your biggest fears
- List 3 reasons why you started your business
Self-awareness provides clarity. This clarity will help you understand your WHY, really understand the BIG problem your business solves and build an authentic brand that attracts your desired customers. As Simon Sinek in his book Start With Why said “People don’t buy WHAT you do; they buy Why you do what you do”.
Create a vivid vision
Cameron Herold Founder of COO Alliance in his book Double Double explained the concept of a vivid vision as a “4–5 page statement, written in the present tense, about where you see your company in three years”. A vivid vision can be created using a mind map exercise. This strategy follows the idea that Steven Covey laid out in his book 7 Habits of Highly Effective People “Always Begin with the end in mind”.
Creating a vivid vision helps you to dream up and visualize what you are looking to build, where your business is building towards and the resources you need to get there. When creating a vivid vision, you should not be bogged by how you are going to get there, just focus on WHAT you want to do.
Herold explaining the importance of a vivid vision said that “if you don’t have a good idea of where you want to be going, opportunities will pull you away from what you should be doing. When you are clear on your direction, you will be able to say yes to the right opportunities and no to the wrong opportunities.”
What your mind conceives in addition to your belief in it will lead you to achieve it.
The best way to create a good vivid vision is through a mind map exercise. A mind map exercise is a graphical way to represent ideas and concepts. It is a simple visual thinking tool that helps you structure information, analyze, synthesize, recall and generate new ideas. The genius of a mind map exercise is that as opposed to traditional note-taking or a linear text, information is structured in a way that resembles much more closely how your brain actually works. This exercise will engage your brain in a much richer way, helping you to come up with more original ideas and new patterns of thoughts.
How to Draw A Mind Map
Start in the middle of a blank page, writing or drawing the idea you intend to develop. It is best to use the page in landscape orientation.
Develop the related subtopics around this central topic, connecting each of them to the center with a line
Repeat the same process for the subtopics, generating lower-level subtopics as you see fit, connecting each of these to the corresponding subtopics.
Reverse Engineer Your Vision
Once you have created a vivid vision of where you want your business to be in 24 months, it is now time to work your way back to understand what you need to do to get there. The focus of this step is to figure out HOW your business can reach your vivid vision.
A good analogy for reverse engineering your vision is the process of building a custom home. First, you determine what type of home you want to build, where you want to build it, how big it should be, how many stories, how many rooms it should have, etc.
Then you reverse engineer your vision by hiring an architect to help you design a plan that matches what you have envisioned. You then hire a general contractor to help you lay out all the materials, tools, permits, labour, etc. you will need to build your house.
Take the endpoint of your goal, your finish line, and working backwards, figure out how you will get there.
The idea here is to start with the end in mind and then trace your step back to where you currently are. To make your vivid vision come true, you have to be willing to work on the following ‘boring stuff’:
- Identify the current state of your business using a SWOT analysis. You want to identify your business's strengths, weaknesses, opportunities and threats.
- Establish SMART goals in the areas of revenue, profit, customer service and employee satisfaction that you need to reach to make your vivid vision come true.
- Set boundaries on what you are willing to sacrifice to reach these goals. For example how much debt are you willing to incur? how many hours per week are you willing to work? how much equity are you willing to give to key employees etc.
- Examine the return on investment (ROI) for each goal you have set to achieve maximum impact. For example, it’s probably best to prioritize revenue-generating goals over office ambience goals.
- Create an action plan to hit your goals by identifying and scheduling activities you need to complete on a daily, weekly, and monthly basis with metrics to determine if you are on track.
Execute With Empathy
Emotionally intelligent business owners can put themselves in the shoes of others and understand the perspective of those they work with so that it guides their own behaviour as they work towards executing their vision. Other people in this context include and are not limited to business partners, investors, employees, suppliers and customers.
Empathy is more than an ability, it really boils down to willingness, it means that you are taking the time to see through the lens of others by talking to them (customers, employees and stakeholders) to get their view of your business and understand their concerns. Empathy will also naturally translate into how you take care of the people around you who are pivotal to helping you build your vision.
To get your people to be all in on the vivid vision you have set, you have to lead with empathy. Empathy helps you to hold off on attaching judgement during interactions with others thereby giving them what Steven Covey refers to as “the psychological air” they need to fully express themselves and explore their views.
Giving people this air is akin to depositing into their emotional bank account so that as the interaction progresses, they are more willing to be vulnerable, share more information with you and tell you what is at the root of their desires, conflicts or concerns so you can address it. At the root of empathy is active listening and you can improve your skills by doing the following:
- Focus on the message being communicated, avoid distractions and be aware of any judgement or preconceptions building in your mind.
- Internalize the message being communicated to really understand what is being said.
- Ask every question required to clarify what you are hearing to really make sure you are on the same page.
- Observe the non-verbal signs accompanying the message. For example, are they showing excitement or disappointment?
- Pay attention to your body language by facing your body towards the speaker and going out of your way to show interest by having open arms, maintaining eye contact and showing facial expression relevant to your reaction to what is being said.
Hi, I’m David and I help franchise owners and entrepreneurs grow their business revenue without having to spend more. Download my FREE Guide to Increasing Your Business Revenue & Profit.