What does it take to grow your business? You probably already know it requires a lot of effort, time and even sleepless nights. Imagine, what your life would be like without that kind of stress. What would you do with the extra time and money?
This article will share some practical tips on how to grow your business.
Secret #1: Increase Your Leads
Review how you attract people to your products or services. Increasing the number of qualified prospects or leads will help you grow your business.
For example: if three out of every ten prospects buy your $1,000 product, your sales will be $3,000. You will grow your business by converting more of these prospects into customers. If you increased the number of prospects from ten to sixteen, your sales will now be $4,800, which is a sixty-percent increase.
Secret #2: Increase Your Conversion Rates
You can double your sales by improving your conversion rates. In the above example, if you converted six out of every ten prospects, your revenue would be $600.
Imagine what would happen if you increase your conversion rates and the number of leads! Your ability to do so is fundamental to grow your business. Examine your sales processes and identify ways to improve them. As we’ve discussed, just small improvements can have a significant impact on your revenue.
Secret #3: Increase Repeat Business
Grow your business with repeat business. Increase the number of times somebody buys your product or service. If a customer buys your product or service a second time, your revenue has obviously just doubled!
What could you do to get your customers to buy your products or services more often? Look for ways to “upsell” them – consider why McDonalds staff ask “would you like fries with your hamburger?”
Secret #4 Improve Your Margins
Look for ways to improve the profit margin you make on every sale. Seek to lower your fixed costs or overheads without compromising your quality, or even consider increasing your prices.
If you increase your profit margin from fourteen percent to eighteen percent, you’ll have an additional $4,000 profit on every $100,000 of sales. Similarly, if you increase your prices by five percent, you’ll have an additional $700 margin on your $100,000 sales. Imagine what would happen if you combined both strategies!
Secret #5: Reduce Acquisition Costs
Do you know how much it costs you to acquire or gain a new customer? You should, as it’s important if you want to grow your business. Lowering the cost of gaining new customers will increase your profit. Look for more creative ways to attract new customers. Examine your existing marketing expenses. Does your current advertising produce results?
Secret #6: Ask for Referrals
Happy customers can often provide an excellent source for referrals. Do you have an existing referral system? Prospective customers who have been referred you from existing customers are often easier to convert. Your existing customer wouldn’t have referred them to you if they weren’t happy with your products and services.
Just making a few small improvements in each of these areas will deliver some very positive benefits, including more sales and higher profit margins.
Let’s use an example. You currently have one service which you sell for $1,000. You receive ten leads every month and convert three of them into customers and the customer only uses your service once. Your profit margin is fourteen percent.
Your profit would be: 10 leads x 30% conversion x $1,000 x 14% = $420.
Let’s now assume you follow the tips I shared above. You increase your leads from ten to sixteen and improve your conversion rate to fifty percent. You increase your sales price by five percent. Let’s further assume your customer buys two of your services and your profit margin increases to eighteen percent.
Your profit would now be: 16 leads x 50% conversion x $1,050 x 2 sales per customer x 18% = $3,024!
That’s a whopping 720% increase!
I hope you feel that my article can help you grow your business and improve your profits. If you did, please share it with anyone who could also benefit from it.
I started the article with some questions. What does it take to grow your business? Imagine, what your life would be like without that kind of stress. What would you do with the extra time and money?
How has your perception now changed?
I’d welcome your comments? Please leave your comments below and I’ll guarantee I’ll reply to you.
Thanks for reading. If you want to grow your business and increase your profits, take action now.