3 Ways To Grow Your Business
As a business owner, running a business can at times seem complex and overwhelming. It feels like there are dozens of different strategies and tactics that we could be using to grow and develop our business.
So much so, that often we end up wondering: “Where on earth do I start?”
But according to Jay Abraham the well-known American marketing guru there is some good news.
Growing a business is not as complex as you may think – and as Jay Abraham points out, there are in fact only three ways – that’s right – only three ways to grow a business.
And fundamentally, the way you can grow your business is by doing one or more of the following 3 things:
- Increase the number of customers
- Increase the size of the transaction
- Increase the frequency of purchase
There aren’t four things you need to be doing, or five, or six: but only three!
So, let’s look at these three variables for growing a business, and how implementing them can exponentially grow your business. And as we shall see, the arithmetic is very enlightening.
The truth is that many businesses seldom look at any of these three variables at all, and if they do, they only focus on one variable at time; and this tends to be the first one – increasing the number of customers.
That’s because finding more people to give you money is the most logical place to start when you need to bring in new business, especially when it’s urgent.
And what often happens is that the other two variables: increasing the value of each transaction and increasing the number of times a customer or client buys from you get ignored.
But what if, as a business owner you were to concentrate on all three of these variables at the same time? The results for the business can be nothing short of amazing.
Let me explain by doing the math’s.
By way of example, let’s say a business has 100 customers. The business sells a product or service at a price of £2,000. And for the sake of this example each customer buys from the business twice per year.
That means the annual turnover of the business is:
100 customers x £2,000 x 2 purchases per year = £400,000
Now, what would happen if the business owner increased one of these variables by 25%?
Let’s try each variable one at a time and see what happens:
Increasing only the number of customers by 25%:
125 customers x £2,000 x 2 purchases per year – £500,000
An increase in the annual revenue of the business from £400,000 to £500,000 – not bad!
Increasing only the size of the transaction by 25%:
100 customers x £2,500 x 2 purchases per year – £500,000
Or, by only increasing the frequency of purchase by 25%:
100 customers x £2,000 x 2.5 purchases per year – £500,000
Basically, if you only work on any one of the variables at a time and increase it by 25% – you get to the same point: an increase in the annual revenue of the business to £500,000.
Now, let’s see the magic that happens when you work on all three of the variables at the same time and increase each one by 25%:
125 customers x £2,500 x 2.5 purchases per year – £781,250
In other words when you optimise just one of the variables, growth in your business will be linear and using the example above your turnover will increase to £500,000.
However, when you optimise all three of the variables at the same time, growth becomes exponential and using the above example, instead of increasing your annual turnover to £500,000; you increase it to £781,250!
Double-check the math’s if you wish, but the numbers don’t lie!
What could that mean for your business?
If you were to apply an increase to each of the three variables, what could it do for your business over the next year?
Of course, it doesn’t have to be a 25% increase. For your business, it might be a 10% increase that will get you the results you want. Or it might be a 50% increase – that’s for you to decide.
Run the numbers, and then start thinking of ways to work on each of the three variables and watch your business begin to grow.