Have you been in business for a while and you’re working your backside off, but you’re not making the money you deserve?
Are you feeling like a slave to your business?
Are you still not able to take a good holiday away because your business can’t run without you?
If so, you’re not alone.
It’s common for first-time business owners to get stuck around the ‘breakthrough’ phase in the 6 stages of business growth (see the image below).
This article is part one of a two-part series on how to grow and scale your business (you can access Part 2 here).
There are two areas you need to focus your attention on so you can finally create the freedom and revenue you desire.
You Have Two Leverage Points as a Business Owner:
1. Your Business Model.
Your business model is the process you apply to you generate your leads, convert them into repeat sales, and how you price your products or services to generate profit. It encompasses the whole ‘customer value journey’ that takes your customer on a journey with you to get maximum results and value, while simultaneously maximising their expenditure with you.
We’re covering your business model in this article.
2. Your Operating Model.
Your operating model is how you operate your business. If you’re doing everything yourself right not, you won’t be able to grow or expand and you’ll remain forever trapped in your business.
Many experienced entrepreneurs often say:
“If you can’t take a break away from your business, then you don’t have a business.”
In a serial entrepreneur’s eyes, a business is something that can be sold on for a profit and it can run completely independently of you.
Your operating model is the piece that will give you leverage, time, and freedom. Discover how in Part 2 (click here).
So to grow and scale your business, let’s first look at the five elements you need to optimise in your business model.
5 Ways You Need to Optimise Your Business Model:
Lead Generation, Sales & Repeat Purchases.
The formula below defines your business growth potential (ref. Ryan Deiss, Digital Marketer, Houston, USA).
Each of the four different elements in the formula makes a big difference to your growth potential. And when you make a small change in each one of them, the compounding multiplying effect is significant.
So what are these elements and how do you go about optimising each one to maximise your growth potential?
1. Increase Your Leads
A lead is anyone who is actively interested in your product or service. How are you letting people know that you exist and how you solve their specific problems? How are you demonstrating your value so that people can become interested in your product or service?
This is the realm of ‘lead generation’ and it’s all about moving prospects from the ‘awareness’ phase into the ‘consideration’ stage of the buyer’s journey.
Methods to generate leads include ‘push’ marketing like social media marketing, advertising, content marketing, email marketing, and networking, just to name a few. And it also includes ‘pull’ marketing tactics like SEO (search engine optimisation).
To get more customers into your pipeline, you need to have strategic methods in place to generate leads. Which strategies can you implement or grow to add more leads into your pipeline?
To develop a ‘tap’ of leads that you can turn on and off when needed, you’ll need to enter the world of advertising.
If you spend $1 on ads and you get $3 in return, then you’ll never have to worry about money again.
Advertising allows you to generate clients on demand. Without advertising, you have to rely on your organic marketing strategies and word of mouth referrals, which of course are very important for small business (85% of all small business transactions come through word of mouth referrals).
But if you want to grow and scale, you’ll need to develop a lead generation strategy that includes advertising.
I highly recommend that you learn how to set up a digital marketing campaign (Caffeinate Digital’s 90-Day Lead Generation program is fantastic), or work with a digital marketing agency to dip your toe into the world of Google and Facebook Ads so that you can start to experience the ease and flow that advertising can bring to your business!
2. Increase the Amount of Customers You Serve
The next element to increase your growth potential is the number of customers you bring into the business.
In order to generate customers from your leads, you need to get really good at conversion, i.e. turning your website visitors and prospects into paying clients. This requires that you master the art of selling, both through:
1. An optimised website, landing pages, and sales funnel, and;
2. Powerful sales conversations that close your prospects.
The ability to close deals and convert prospects into paying clients through compelling sales conversations is a real skill that you need to learn, develop, and practice continuously.
If this part makes you uncomfortable, you’re not alone, but you must focus on becoming great at selling as quickly as possible!
If you haven’t already, I highly recommend that you attend an intense sales training course. I did this a while back and my conversion rate went up from around 10-20% to more than 50% conversion. With a few solid strategies, you can learn how to become much better at converting leads into clients.
If you do nothing else, just focus on learning to close clients through powerful sales conversations and your growth potential will increase dramatically.
Now that you’re able to convert more leads into customers, the next thing to maximise is the profit margin on your products or services.
3. Increase Your Profit Margin
This is all about your pricing strategy. Your profit margin is the difference between your selling price and your cost for delivering that product or service.
For example, if you run workshops at $100 per ticket and you have 10 clients per workshop, then you generate $1000 revenue. But if your cost of venue hire and catering combined is $600, then your profit margin is only $400 per workshop. To increase your margin, you’ll need to either increase your price per ticket or find ways to reduce your venue and catering expenses.
What can you do to increase the profit margin on your products or services to increase your business growth potential?
4. Frequency of Purchase
The final element in your growth potential formula is the frequency in which you bring customers into your business. If you run webinars once every three months to generate leads and clients, then can you find ways to start doing that every two months instead?
The more frequently you’re generating leads and clients, the greater your business growth potential.
What can you do to start increasing the frequency of purchase?
5. Map Out Your Customer Buying Journey
Here are the typical steps involved in the customer journey.
- BECOMING AWARE
How will you make prospects aware that they have a problem you can solve? At this stage they’re often unaware that they have a problem. Methods I recommend to build awareness are content marketing, free videos, networking, podcasting, SEO, and advertising, for example.
How will you educate your prospects about their problems and the different ways they can solve them? How will you catch your prospect’s attention and invite them into the journey with you? Great methods are social media posts, live videos, free masterclasses, content marketing, blogging, podcasting and YouTube videos, for example.
How will you get prospects to engage with you and your brand? The best way to do this is via a compelling lead magnet. A lead magnet is a digital asset of high value, that solves a specific pain point for your clients, that you provide for FREE in exchange for a customer’s contact details (usually name and email address). It’s used to build your marketing email list and to generates sales leads.
Your prospect has now decided to engage with your brand by downloading something you’ve offered for free. Now it’s your job to ‘nurture’ them into a paying client. You do this by continuing to build trust and confidence in your brand by sharing your expertise and solving their problems for free. The easiest and most effective way to do this is with an automated email nurture sequence via your CRM (email database). Include videos in your emails if you can, they’re very effective at connecting people to your brand. Your prospects will be so impressed by your free content that they’ll now have the confidence to BUY something from you. At this point, they become a paying customer.
Your prospect has now decided to dip their toe in the water with you by purchasing something that you’re offering. At this point, they’ve entered into your ‘service ladder’ where they’ll work their way through the different services you have to solve their challenges.
Your job is obviously to serve and delight your customer so that the become a brand advocate and start spreading the good word about your business. You’ll need to offer something to keep your brand advocates engaged with your brand, perhaps through an ongoing membership or affiliate arrangement.
How will you lead your customers through the entire buying journey with you?
Get crystal clear on your specific customer buyer’s journey and put a strategy in place – including retargeting – in order to maximise your business growth potential.
The implementation of marketing strategies to nurture your buyers along the customer journey will bring far greater levels of revenue into your business – which is awesome. Need help with your marketing plan to generate more revenue? Reach out for a FREE discovery call to see how I can help you today!
So in this article, we’ve looked at Part 1 – Optimise Your Business Model. Head on over to Part 2 to find out how you can optimise your Operating Model to achieve huge profit and growth!
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In service to your success,
Kate De Jong, Ph.D