If you’ve decided that your business needs to grow, there are several issues to consider before you invest the time, effort and money into expanding, writes Alan Manly, author of The Unlikely Entrepreneur.

The first thing to ask yourself is if you really want it to grow and if you’re making enough money in return for the time and effort being invested. Your current work-life balance, which is important to most people, may not always be improved by building a larger business.

5 things to consider when growing your business

If you do think growth is right for you, here are five ideas to consider before you invest emotion, time and money into growing your business.

1. Review your customers

It’s critical that the first thing you do is to take a hard look at your customer base and don’t be afraid to be brutal. Do you make a profit out of each customer? If not, why not? When will they be profitable?

If the answer is ‘maybe’ with all sorts of excuses, figure out when and how you’ll make a profit from them. If they’re not giving you money, they’re taking it from you. In the end, you’ll have a chart of the profitable and less profitable customers. Try to make them all a little more profitable.

Then there are parasitic customers that you need to pass on to your nearest competition. One way to do this is to increase your price at the same time the competition is having a sales drive. The customer is likely happy to get a better deal, and you’re happy as you’re working less and making more. No reason to worry about the competition.

2. Review your business efficiency

You should also be looking closely at your cost base. Are you really as efficient as the competition? You can do that by looking over the hill at similar businesses. What’s your competition doing regarding administration? Is everything online that can be? Once a company is past the startup stage, habits become entrenched. Review why you do things the way you do.

Remember, all savings go to the bottom line. Efficiency is a means to grow a business with no extra customers. The same income with reduced costs due to efficiencies means more profit, which is growth by another name.

3. Get bigger

Would a bigger operation really be actual company growth? If you advertise and get more customers, will your input costs decrease?

If you can service more customers, for instance, with the same real estate footprint, more customers should equal more profit, with no further investment.

4. Improved customer experience

Is the customer interface as friendly and efficient as it could be? Are you keeping customers along the customer journey or do you have leakage? How do you present your billing system to customers?

Customers often give up waiting for your lean mean reception staff, so don’t sacrifice customer experience for cost savings. It’s a common pet hate for customers and another customer experience disaster. Be sure to regularly review how you treat customers.

Any losses saved are again more profit, with most likely little extra overheads. Remember, every extra customer who comes back is true business growth.

5. New products

The best new products are product extensions. The same but different, as they say. Can you devise a service or product that fits the current customer or maybe a similar type of customer?

Check out the competition here and overseas. Google every manner of definition of your business to see what can be added on. As you’re an established business, the additional cost should be lower than a new market entrant, thereby giving you a growth opportunity at moderate cost. If, of course, you find a new wonder product or service, seek to utilise all the back-office resources to keep introductory costs low.

The size of a business is easy to declare when asked, and the top line is not usually one that’s kept confidential. But real business growth is in the margins. Every sale should have a margin. All those little margins, usually referred to when measuring each line item, add up to the bottom line.

That’s how you’ll know if you’ve grown your business because the bottom line improves.

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Now read this:

https://www.kochiesbusinessbuilders.com.au/7-common-mistakes-that-cause-startups-to-fail/