We’ve all heard the statistics that 80% of small businesses fail. No one wants to be a part of that statistic, but so many small business owners never get past the start-up stage.
If you have successfully started your business and earned a profit, Congratulations!
The work isn’t over though. You’re probably working a ton of hours, spending less time than you want with your family, and probably need to hire some more help.
Fortunately, there are plenty of small business owners who have been where you are, so we’re going to share some tips from one who has made the transition from startup to business growth.
Mike Andes started mowing lawns at 11 to pay for college. By 24, he had started Augusta Lawn Care, and today he makes 7-figures selling Augusta Lawn Care franchises.
There are currently 60 franchises, so he knows a lot about how to grow a business.
We’ll discuss aspects of growing a business including:
- What does it mean to grow a business?
- What is considered fast business growth?
- What the fastest-growing companies do
- How to increase sales to your existing customers
- How to find new customers
- How to grow your business with marketing
- How can I grow my business with no money?
The information and resources we provide should give you the knowledge to grow your business, get new customers, and increase revenue.
What does it mean to grow a business?
To grow a business means to increase revenue. With the growth in revenue may come a need to hire employees, automate pain points, or set procedures to dictate the processes that are used to provide a service or sell products.
Ultimately, the focus is on increasing revenue. Mike told us:
There are a variety of different strategies when you are considering how to expand your business. These will depend on the services you provide, the industry you operate in, your available resources, and how much of the geographic market you are currently serving.
Some of the most common strategies for small business growth include:
- Increasing the revenue from each current customer
- Offering new services
- Hiring more people to provide services to more customers
- Increasing marketing
- Expanding to another geographic location
- Selling franchises
We’ll discuss each of these with some examples of how Mike and other successful businesses increased their revenue.
But first, let’s discuss what is considered fast growth for a business.
What is considered fast business growth?
A successful business should be defined as one that helps the customer base, employees, and the business owner reach their goals. If the business successfully does that, you are already successful.
Mike told us:
After that, you’ll set new targets and look for new ways to challenge yourself. Mike told us his new goals are:
If you want to measure your success against others, there are some statistics you should consider.
Let’s look at some facts most people aren’t really aware of:
- During the first year, business growth will be approaching infinity because you had no revenue before you started the business. Make sure to compare first-year growth in pure dollar amounts; otherwise, a calculator will say “Error” or “Undefined”
- It’s easier to grow revenue from $100,000 to $1m/year, than it is to increase the money a business makes from $1m to $10m/year.
- Each industry has different growth targets and strategies. What might be rapid growth for one industry might be horrible for another
- The Federal Reserve typically expects GDP growth between 2-4%
Now that you are familiar with that information, Revenue Rocket classifies revenue growth in 5 different categories:
- Fast growth: Up to 15%/year
- Rapid growth: 15-25%/year
- Very rapid growth: 25-50%/year
- Hypergrowth: 50-100%/year
- Lightspeed growth: 100%+/year
In the same article, they suggest no more than a 30% increase in revenue and 15% increase in profit to foster sustainable business growth.
That’s consistent with what Mike told us:
According to Fortune’s 100 Fastest Growing Companies, the top 100 fastest growing businesses have a 3-year annual growth rate between 15-80%, which means they increase revenue 33.1%-483.2% in 3 years.
It’s important to note that most of these were in tech, finance, and pharmaceutical companies.
What the fastest-growing companies do
The business model adopted by many of the fastest-growing companies is one where they will:
- Get funding from venture capitalist firms and banks
- Run multi-million dollar marketing budgets
- Use computer automation systems that handle significant amounts of the daily operations
- Run at significant losses for years
- Sell billions of stock to fund running losses for a few more years
- Then become profitable
These are all things that other businesses probably won’t be able to get away with. Small business success can still learn something from this business model.
Get good at marketing strategies, scale the business with software, and focus on providing a great product or service.
Mike gave us different pieces of advice that suggest that the lessons from major companies can be applied anywhere:
But he also reminded us that most of us aren’t Fortune 500 companies:
More importantly, he reminded us that our target audience doesn’t expect us to be a massive corporation. They will appreciate it if we have our own brand identity.
How Small Business Owners Increase Sales to Current Customers
Your growth strategy should include increasing the value of each customer.
There are a ton of ways to increase total customer value, including a customer loyalty program, upselling, subscription-based business models, and marketing tools, like reminders that they didn’t complete a transaction.
We’ll discuss each of these strategies and how they can accelerate growth.
Customer Loyalty Program
The 2018 Bond Customer Loyalty Report found that 70% of people say that they are likely to recommend a company with a good loyalty program, 77% are more likely to continue doing business with a brand, and 63% modify their spending to get the most benefits.
Despite this, no industry has more than a 50% loyalty program satisfaction score. That means there is a ton of room for improvement, and if you can get it right, you’ll be ahead of your direct competitors.
I feel like this should be repeated consistently:
Buildify has a review of some of the best apps for loyalty programs on Shopify, and many of them will be compatible with other websites.
You will most likely need a CRM to maximize potential because 88% of people prefer suggestions that are tailored to them.
Let’s look at another strategy many businesses use.
Upselling is the process of suggesting something that goes well with a product that the customer might enjoy. You see it all the time at fast-food restaurants:
Even Amazon does it. In the screenshot below, they suggest two books that people commonly buy when someone buys Building a StoryBrand.
If someone chooses to buy all three, the purchase is 2.61 times the revenue.
If you aren’t doing this, you need to start today. It’s an amazing growth strategy. Neil Patel, a rockstar marketer, suggests trying to make 30% of your profit come from upselling and tells you how he does it.
Just make sure the suggestion is relevant. The Shopify App Store has 418 different upselling software apps.
Mike also mentions it briefly as one of the key strategies to encourage customers to spend more.
Check out our podcast with Mike below:
The Shopify App Store has 418 different upselling softwares, so make sure you read reviews before you choose one.
Alternatively, you could review Predictive Analytics information on providers.
Imagine what your profit would look like with an extra 30%!
Don’t get too caught up in that because we have more killer tricks to grow businesses.
Anyone who uses business software has seen how a subscription-based model works.
A quick search can find an Office 2019 disc for $49.99, but if you order Microsoft Office 365, it’s $10/mo or $100/year.
Given the typical person buys a computer every 4 years, the subscription-based model generates up to 9.6x the revenue and reduces the costs of manufacturing, transporting, and storing the disc.
That’s great for software companies, but how does that apply to other types of companies?
Price Intelligently has a great blog on subscription-based models and points out that it will consistently increase total customer value until they cancel the subscription.
This model can be used with any product that either releases new products routinely or sells disposable products.
In service-based industries, subscription-based pricing can be used to strengthen customer loyalty (commonly used with UberEats/Doordash) and/or stabilize revenue.
I have seen HVAC contractors charge people $20/month instead of $99 twice a year to do preventive maintenance with success.
If you can use this model, I strongly suggest you do. If you are an e-commerce store, check out Shopify’s walkthrough on subscription orders.
Keep reading for ways to find new customers.
How a Business owner can find new customers
There are a variety of ways that business owners can find new customers. Deciding which way works best for you will be based on your business, your personality, and other conditions.
Let’s look at some of the most common ways.
Networking events can be a great way to meet potential customers, especially if you are a B2B business. Other business owners will come to these events to exchange information about whatever the subject matter is.
They may be potential customers, or they may be someone with whom you can exchange referrals.
Increase high performing marketing campaigns
If you find a paid marketing campaign is performing well, you can increase how much you are spending on it, but do it slowly because 10x spend might only be 8x revenue.
Reach out to past customers
As long as you have some type of customer relationship management, you should know when a customer last interacted with your business, exactly what services or products they got, and whether they were pleased with the service.
Many people have busy lives, and people receive tens of thousands of emails a year. They might have gotten distracted and forgotten to reschedule their services.
Reaching out to them could make a company more money, especially if it’s something they do infrequently, like get oil changes, seasonal maintenance, or dentist appointments.
Encourage users of your service, products, or site to share experience
One company we interviewed told us they specifically ask customers to mention the full name of the company when writing reviews to help Google rankings.
A common practice in the photography industry is to request customers tag the photography company when they share pictures on social media.
This helps increase the relevancy of the business and counts as free marketing. In addition, if the customer is part of your target market, someone they know is probably a target customer.
Open another location
If you have gotten a sizeable share of the target market in your area, you may need to open another location. Depending on the type of business, the location may be in the same city or a different city.
Mike told us:
Opening a new location for something like a smoke shop can be done several miles away in most big cities because there are smoke shops almost every square mile.
Something like a lawn care business might require another truck that services a different area of the city.
If you find you can’t grow in the city, you may need to look for customers in other cities. At that point, you’ll want to consider if opening and running the location yourself makes sense or if you want to start a franchise.
Mike told us:
Selling franchises can turn other people who are thinking about starting a business into customers, but selling franchises require well-documented policies and great business systems in place to make it where the new business owners don’t damage the reputation.
Most businesses have not clearly defined their company policies enough that they are ready to grow a business by selling franchises, but if you have, you should check out our posts about how to scale a business and how to sell a business.
Mike told us:
How to grow your small business with marketing
Finding customers with marketing can be a challenge during the early stages of business. There is a lot of trial and error before potential clients become new customers. SalesForce has a blog about why it takes 6-8 touches to get new customers.
That means they’ve done their research, looked at reviews, looked at pictures of your work, asked friends if they are existing customers, and seen many of your ads. Small businesses are competing with other small businesses and large companies for new customers.
Be prepared to learn a lot about marketing or hire someone. Either way, don’t expect your marketing plan to generate results that happen overnight.
Stephen from NW Softwash spent a lot of time talking about marketing in our interview with him about power washing. He talks about social media, marketing budgets, building a team, and how he grew his business up to $120k/mo by the age of 21. Take a few to listen to what he has to say.
You’ll want to use tools like Google My Business to help you show up in search engines. You’ll want your company website to be easy to use as customer experience can help or hurt a business.
You might want to have a professional copywriter create your landing pages.
Then there are paid ads, but that is a complex market. I’d recommend talking to someone who specializes in paid ads so you don’t waste your buying power. Let’s look at social media.
How to use social media to grow your business
Many companies use social media to reach new customers.
Social media gives you a place to share the good news, show you genuinely care, while at the same time exposing you to a vast amount of data about both existing customers and new customers, hence the rise in spending on social media by both big business and small companies.
If you want to know how to grow a small business on social media, the best thing to do is follow what people with massive followings do and learn how to apply the same strategies to your business.
Learning from other people’s success is part of the trick if you want to know how to make your business grow.
How to grow your business on Instagram
If you want to use Instagram to increase business, I suggest you review their help section and other resources for businesses who want to market on their platform.
When you market on this platform, it’s all about pictures, so make sure to have fun ones mixed in with work you are proud of.
As an owner of a small business, I know how tempting it is to always be focused on business, but make it a point to celebrate small victories for your team, goofy moments, and things that bring a human touch.
Mike told us:
You should also find local “celebrities” or micro-influencers and try to get them to communicate with their audience about your company.
Just make sure they actually love your product. People can tell when someone is being insincere.
Ultimately, Mike reminded us:
How can I grow my business with no money?
If you don’t have any funds and can’t take loans to market your company or do any of the other tips to increase sales discussed in this post and in the podcast, you should probably start thinking ahead and reinvest some of the profits from your business.
When people ask me how to grow my business, the first thing I ask them is:
Most of the time, they don’t have a clue how to answer it. One customer decided to spend $150k to bring 30 products to market, but he wouldn’t start selling any of them until all of them were ready to sell.
It’s 5 years later, and the company hasn’t sold a single product.
This kind of expenditure is comparable to buying large fixed assets, which Mike told us:
The point of this is that regardless of whether your company is profitable, losing money, or has not brought its products to market, start small.
Master marketing, identify your target market, and learn how to efficiently run a company, then expand.
Or you can try to take out loans and hope that it doesn’t maintain the status quo. Whatever you do, remember the best piece of advice Mike gave:
Basically, if you want to grow your business, keep working. When a process breaks or takes too long, fix it, make it easier for your customers to buy from you, and learn marketing skills.
If you stick to it and learn from your mistakes, you will eventually become a master of your field.
We hope you found this information informative. If you enjoyed the blog and the podcast, make sure to follow us for more great insights from business owners who have managed to make a great living in a variety of fields.