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How Cash Flow Can Make or Break Your Business

Managing cash flow is one of the critical aspects of business success and survival. As much as 82% of businesses crash and burn because of poor cash flow management. The smaller the business, the more crucial and challenging it is to maintain a steady income and pay the bills on time.

But what exactly is cash flow, and why is there so much talk about cash flow management when it comes to business? Let’s go through some basic concepts, understand how it affects our businesses, and find out solutions to improve cash flow.

Understanding Cash Flow

Cash flow is the movement of cash into or out of an account. This is known as the inflow or outflow of cash in a business organization. When more money is coming in through the sale of goods or services than the actual cost of running a business, it is said to be cash flow positive; cash flow negative if it’s the other way around.

Businesses will experience cash flow positives and negatives throughout their lifetime. Start-ups are the most difficult to manage for having low cash reserves and susceptibility to undercapitalization. However, they’ll have better opportunities to accelerate their business through loans, stocks, or bonds after demonstrating their ability to handle cash flow properly (known as cash flow statement).

Operational cash flow is the movement of cash during its regular business activities, e.g. receiving payments from customers, settling monthly dues, and paying out employees. Investment cash flow applies when a business acquires properties to further its goals. For instance, acquiring a vehicle through a financial institution can help boost inflow by speeding up delivery and reducing logistical cost.

Difference between Profit and Cash Flow

Some financial experts use the metaphor of looking at a still photo and watching videos clip to differentiate profit and cash flow. Profit is usually regarded as stationary data, which is determined by comparing the opening and closing balance of a company’s primary account or by its total net worth by the end of the year.

Cash flow provides a better picture of how businesses performed over the course of time. It tells us where the money is coming from, where it’s going to, and most importantly how fast. Without cash flowing in and out of the business, the whole system will come to a grinding halt. All gains in the form of assets, products, or inventories are of little consequence at this point. Having no cash to work with, businesses are on the verge of bankruptcy.

In other words, a company can increase its net worth but may actually lose the business if it doesn’t generate inflow through sales, and utilize these resources to pay the right people working for the company and acquire the best technology to improve business.

How Cash Flow Affects Your Business

Managing cash flow can be a tough balancing act for small business owners. Increasing inflow and keeping outflow at a minimum on a shoestring budget is especially challenging for small business owners.

Consider the following aspects of cash flow management:

Cost of running a business. The initial cost of starting a business is just a tiny part compared to the actual cost of running it. People can get this information through research and interviews with successful business owners. Operational costs make up the outflow including lease, water and electricity bills, fuel and maintenance, inventories, employees’ salaries and commissions, monthly amortizations, taxes, insurance, contingencies, penalties, and surcharges (if you’re not careful), and the list goes on. Expenses are either fixed or fluctuating. Some experts suggest putting a little extra and exaggerate the cost at the planning stage. The purpose is not to deter you from starting your own business, but to prepare yourself mentally and financially for eventualities. Running out of cash and borrowing only when you needed one sets you up for business failure.

Real and potential income. How much money can you realistically make with your business? Some businesses, especially new ones, can be overly optimistic and assume they can strike it rich too quickly. We need to consider other factors as well, such as the competition, supply and demand, sustainability, market value, what the trends are and where they’re headed for, and so on. Unlike the previous one, we need to be a little conservative on this. We cannot expect our chosen industry to follow the same trend all throughout the year. Our businesses should be flexible enough to adapt to changes. If the demand for a certain product or service drops, what are your other options? Do you have a method in place that allows you to get more customers and build relationships with them? The key is to maintain a specific number of customers to keep the ball rolling in order to stay in business.

Method of payment. Your business may receive payments either on a cash basis or receivables on a weekly or monthly basis – or you may have both. Cash-based transactions allow businesses to have a steady inflow of cash, whereas receivables carry some risks due to some customers not settling their dues or paying too late, costing a lot of money to your company. You can mitigate the risk by imposing penalties for late payment or encouraging them to pay early by offering rebates and discounts for settling their dues early on. Just keep in mind that any delay with the cash will cost you money. If your business needs to pay out employees on the 25^th of the month and you still have a lot of receivables unpaid, you might have to borrow on interest just to get your employee’s paid (this justifies why you need to penalize late payments).

Steps to Improve Cash Flow

With these in mind, let’s look at some of the ways to improve cash flow in your business.

Forecast your cash flow. From your research and interviews with business owners create a chart of your projected inflows and outflows for the whole year. Make sure to include all the small details and make it as comprehensive as possible. Use this to benchmark your progress when conducting your business.
Identify your key performance indicators (KPI). This answers the question where most of your resources should go to keep your business running. Some businesses failed just because they didn’t use their resources on things that would help improve its overall performance. For instance, not having enough inventories to cater a large number of customers or not investing in technology or equipment to speed up delivery and enhance customer experience will have consequences in your cash inflow.
Manage your inventories. Too much, or too little, can make your business cash flow negative over time. You need to be able to predict customer orders to keep a steady flow of cash going into your business, but at the same time, we want to avoid excess or unwanted inventories sitting on the shelf for too long.
Faster inflow, slower outflow. Perhaps the most important principle when it comes to cash flow management is speeding up the inflow of cash and slowing down the outflow. To increase inflow, obviously you need more customers. But more importantly, you need to develop good customer relationships, and have a loyal customer base to keep the money flowing in. Customer referrals from loyal customers could increase the inflow even more, which is why we put a strong emphasis on customer relationships with our Small Business Dream mini-CRM. To minimize outflow, you’ll just have to keep the money in your primary account for as long as you can. If you have to invest in technology, property, or equipment, acquire them through a financial institution instead of paying out in cash. The longer the amortization period, the smaller your monthly dues are, and the bigger your potential inflow will be.

Take your business to the next level through sales and marketing automation. Visit SmallBizDream.com and start using our suite of tools to increase your sales and profitability like never before.

Time Management Skills for Increased Productivity

Time management is an essential part of becoming a successful entrepreneur. The ability to make full use of time can have a huge impact on productivity and is one of the contributing factors in growing a business.

Acquiring this skill takes discipline, having the right mindset, and the right tools to get the job done. This can be achieved with modern business applications, time management tools, and CRMs such as Small Business Dream.

First, we’ll take a look at how to identify the problems and difficulties that limit our ability to stay focused and be more productive. Next, we’ll explain some ways to take control of our time and introduce a CRM application to enhance time management skills of business owners and the workforce.

Eliminate Distractions from Work

Distraction is the thief of time. Many businesses are losing a lot of money due to unproductive use of time. Unfortunately, most of them are pretty common in the workplace. Recent surveys reveal that nearly half of the working hours are lost to unrelated activities such as making personal calls or using the social media and the Internet for non-work purposes.

Eliminating distractions from work frees up a lot of time on your daily work schedule and allows you to accomplish more than you used to. Some distractions are unavoidable, but for the most part, being distracted is a matter of choice.

Keep a Record of Time Usage

The first step to mastering your time is to trace back how many hours you’ve spent on a given task. If you’re like a lot of people and don’t know what you do half the time, using a time tracker will be useful in monitoring where you’re spending your efforts. You don’t need to use a fancy app or program. Just grab an excel sheet or print one off online.

Using a time tracker, people can spot the problems right away. They’ll be surprised to know how much of it is squandered away on activities that have nothing to do in achieving their goals. Others find they are spending too much time on tasks which have little or no impact to their job.

Try to recall everything you’ve done on regular work days and make an estimate of how much time you’ve spent on each one. If possible, include every distraction, idle hours, and other non-related activities in between.

Notice how much time you’ve used on each group of tasks. Sort them out according to the ones that have the greatest impact to your line of work to the least ones. Using this information, you can map out a strategy to maximize your time, eliminate time-consuming tasks, and concentrate on the most important ones.

The ideal number of hours spent on each task usually depends on one’s role. For business owners and seniors who need to coordinate tasks and make corporate decisions, they are most productive doing leadership roles in key areas. Micromanaging every task may not be the best use of time for this type of work.

Organize and Prioritize Your Tasks

There are different approaches to organizing and prioritizing tasks. Some authors encourage doing the most difficult ones first and the easier ones last. These tasks usually have the biggest impact to productivity and they can have serious consequences if not acted upon immediately.

Among the different approaches include:

The 80/20 Rule
“Eat that Frog”
ABCDE Method

The 80/20 Rule is probably the oldest, yet the most powerful principle that applies not only in business but in almost every aspect of life. The rule states that out of every 10 things that must be done, only 2 of them will have the greatest impact in achieving your goal.

After reviewing how much time is spent during a typical working day, you can start identifying the most important ones depending on the type of work you have, or what roles you need to fulfill for the company.

For business owners, they need to prioritize tasks that revolve around their role as decision-makers and overseers. Sales and marketing teams will have to focus more on customer-oriented tasks such as customer acquisition, follow-ups, and closing deals. Smart companies use CRM to increase productivity in these areas and boost sales.

Small Business Dream is one of the best examples of CRMs that help sales and marketing teams deal with every customer-oriented task and reduce a significant amount of time collecting, organizing, prioritizing, and updating customer information.

The “Eat that Frog” principle was coined by Mark Twain, who said “If it’s your job to eat a frog, it’s best to do it first thing in the morning. And if it’s your job to eat two frogs, it’s best to eat the biggest one first.”

While a bizarre example, it is another approach to prioritizing the most important tasks of the day. Doing the important tasks first, allows you to have the best output since you’re working from a fresh start when your energy is high. For sales people, they need to check on their prospects and customers first before proceeding to their next task. Some CRMs have certain features that force them to deal with those tasks first when they go to work.

Small Business Dream’s Action List will show up every contact they have to link up via social media or phone calls within the day. Failure to communicate with anyone on the list could mean missed opportunities or customers losing interest in the company. This could cost you hundreds, even thousands of dollars, in potential income.

The ABCDE Method is a way of organizing each task based on their implications for the overall outcome.

The ABCDE Method stands for:

A-tasks – These are tasks that only you alone can do and will have serious consequences if not completed within the day. Following up on a key customer is considered an A-task.

B-tasks – These tasks need to be done, but not necessary in achieving immediate goals. These tasks can wait and should be addressed only after completing all the A-tasks. Consequences are minimal for B-tasks (e.g., reading emails, and checking on low priority customers)

C-tasks – These tasks contribute little in achieving company goals and objectives. These tasks are optional and don’t have any consequence at all.

D-tasks – These tasks can be done by anyone else. Delegating small tasks gives you more time to focus on your main objective. Hiring a VA can help you skip most of your routine tasks and work on your main task right away.

E-tasks – These tasks serve no real purpose and are not necessary for getting the work done. Hence, they must be eliminated.

Plan Your Day Ahead of Time

An hour spent in planning can save you ten hours executing them. Make it a habit to spend an extra hour planning on how you can tackle the job the next day.

Planning not only organizes your thoughts on how to spend the day; it also makes you more confident that you can accomplish your goal because you’ve already planned for it.

List down all the tasks that need to be done and prioritize them according to importance. Apply the 80/20 Rule and focus on things that matter most, first and foremost.

If you have to handle interruptions from work, include them in your schedule. Block off your time and refrain from doing two things at once.

Learn CRM to Manage Time Wisely

Small Business Dream sales and marketing CRM contains many useful features to help business owners and sales people achieve phenomenal growth by focusing on high-priority tasks such as following up with customers on the Action List through social media and phone calls, adding notes about a particular customer, leaving a message and re-scheduling the next appointment at a pre-determined date. Opt-in customers and visitors in the Sales Funnel are added instantly to the Action List.

Sales teams can concentrate on other customer-oriented tasks after completing the Action List for just an hour or two. If the volume of incoming customer information from walk-in visitors and customers gets too high, they can use Small Business Dream’s Card Scan function and save a lot of time transcribing all the customer information.

Take your business to the next level through sales and marketing automation. Visit SmallBizDream.com and start using our suite of tools to increase your sales and profitability like never before.

How Smart Companies Use Small Business Dream Data to Predict Customer Orders

Being able to predict customer orders based on real-time information is one of the keys to your sales success in today’s competitive market.

Today, almost every company has developed its own way of establishing meaningful customer relationships, including loyalty programs, customer referrals, or even network marketing to some extent.

We’ll take a look into customer relationship management (CRM), particularly Small Business Dream, and how it helps smart companies to predict customer orders and stay ahead of the competition.

Getting Down to the Facts about Your Customers

Collecting important information about your customers is the starting point in developing a strategy to determine what your customers would be interested in.

Small Business Dream’s client acquisition tools provide companies with a very efficient way to collect customer information from high-quality leads.

Small Business Dream accomplishes the task in two ways:

card scan function
sales funnel

To get only the best, high-quality leads, we need our client acquisition tools to target specific type of customers based on their needs and interest.

A walk-in customer who gives away his business card or contact information is interested to know more about the company and what it has to offer. It’s the same thing with online visitors and customers signing up to the mailing list on a website’s sales funnel.

As more information about your customers becomes available for the company using Small Business Dream’s follow up and customer feedback tools, you can start analyzing the data, connect the dots, and predict customer orders.

The following information from Small Business Dream’s customer data is crucial for anticipating customers’ response and buying habits:

Time/Date. What particular time of the month or year do they usually make these transactions? What particular time of the day or week do they prefer scheduling their appointments? This information will help you when preparing your next inventory or accommodating old and new customers days or weeks ahead.
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Frequency. How often do they make their purchase or avail of theservice? Do they take action to your drip campaigns and surveys often or does it take them weeks or months? Noting this customer habit will help you determine the likelihood of having repeat customers or converting new ones.
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Customer response. Your customers may not always give a direct response whether or not they are likely to buy the same product or use the same service, and some might respond better with more subtle ways like asking them if they would recommend using your product or service to anyone or asking their own honest opinion about it.

Big companies use Enterprise Resource Planning (ERP) systems to know exactly which products and services are frequently bought or used.

Small Business Dream allows tech-savvy users to accomplish the same with just a little trick using Excel spreadsheets. Customer information can be easily downloaded in CSV file, and users will be able to process and analyze all the data presented in exquisite detail.

The big advantage of CRMs like Small Business Dream over ERPs is that it lets business owners and sales agents deal with every customer on a personal level, make their own assessment about the customer, and set priorities based on how they respond to the call.

Small Business Dream uses a scale of 0-10 to indicate which customers need more attention and which ones require less. However, it’s important to never prejudge your prospects based on customer data alone as there are cases when low priority clients make major buying decisions out of the blue.

Enhance Customer Engagement with Small Business Dream

The ability to record conversations with your prospects and customers, make notes, set priorities, and schedule next upcoming events all in one place makes Small Business Dream extremely valuable for both online and offline businesses.

This CRM feature makes real-time customer engagement possible for tech-savvy companies, especially those with salespeople working in shifts who need to get the facts right about each individual customer on the spot.

Small Business Dream makes it all possible by allowing business owners to categorize each customer for an easy lookup if they want to check on a specific type of customer only.

For instance, they can view just the customers who have subscribed to any of their email drip campaigns and check on whether they wanted to know more or if an upcoming purchase is already in order.

Another feature which makes Small Business Dream such a jewel in predicting customer orders is its ability to create highly personalized surveys through the survey builder. You can embed a tracking code for Google Analytics into your surveys to monitor real-time statistics about your prospects and customers.

Although Google Survey offers the same functionality, they are not as flexible as Small Business Dream’s survey builder. Moreover, Google will also require some fees to access some of their premium features, and are limited as to the number of surveys that can be done each month using its free service.

Choosing the Right CRM to Predict Customer Orders

With plenty of CRMs to choose from on every turn, you might be thinking which one will actually help you to predict customer orders. Small Business Dream offers a helping hand to every business owners who want to grow their business FAST without spending a lot of money in the process.

Take your business to the next level through sales and marketing automation. Visit SmallBizDream.com and start using our suite of tools to increase your sales and profitability like never before.

6 Ways You Can Hire The Big Guns

Hiring new employees is probably the most important aspect of any small business. Most business owners waste a lot of time, money, and energy on finding the right fit for your business. Hiring the wrong person is not only costly, but it devalues your brand as well.

According to most recruiters, the cost of a new employee – including your time, training, and benefits – is $240,000. But if you hire the wrong person it can cost you up to $840,000 when you factor in total compensation, including severance, additional hiring, and other disruptions to your business.

Hiring is more than just placing an ad on Craig’s List, interviewing, and then checking out references. It’s important to have the proper process in place each time a position becomes open.

1) Write Better Job Descriptions

This is often an overlooked part of hiring. If you don’t describe exactly who and what you want, then you’ll get the wrong candidates applying for the position. Many companies write detailed descriptions with long lists of responsibilities and requirements; but a study done by the Wall Street Journal says that this can actually alienate a lot of qualified employees.

In the study researchers found that in 56 job ads, those that emphasize on what an employer can do for the candidates found they attracted better quality candidates. Write ads that create excitement and value for the candidate and you’ll find the right applicant begging for the job.

2) Interview Multiple Candidates Multiple Times

This may seem intuitive but it’s crazy how many people don’t take the time to interview more than one candidate. If you let excitement or lack of time get in the way, you’re more likely to grasp the first promising lead that comes your way.

You also want to get a second opinion on your candidate. Find either a co-worker or another manager to give your candidate a second opinion, preferably someone with a different personality than you. It is great to see how the candidate does under different circumstances.

3) Focus On Soft Skills

You might be tempted to hire somebody based on work experience and whether they have certain skill sets but social intelligence, institution, conflict resolution, and critical thinking are all skill that cannot be easily taught—if at all. These should be considered into your decision. Not just an impressive resume.

4) Embrace Social Media

Like most employers, you might do a quick Google search on your candidate and see what comes up online. But you should also be looking through the candidate’s social media profiles to check out what sort of person they are. At the very minimum, you should check their LinkedIn profile; but you also want to search them on Facebook and Twitter as well. If you see lots of photographs of parties, then you shouldn’t be too surprised if they call in sick on a Monday morning.

5) Improve Your Interview Skills

Sometimes even star candidates don’t perform well in interview situations. It’s your job to make them feel comfortable and act as naturally as possible. You should think out your interview questions beforehand and roll play with your own staff to make sure you can guide your interviewees to get answers you want. Become a skilled interviewer and you’ll find your hiring will improve.

6) Have A Probation Period

When you hire somebody it’s best if you make it clear that you’re hiring them on a trial basis. You never know what issues will pop up. Sometimes you underestimate the chemistry required for an applicant to be successful. Even after you’ve done all your due diligence you never know if a person will really work out.

Another strategy you can use is to hire your candidate as a freelancer or an intern. That way if they don’t work out then it’s not such a big impact. Or if you’re desperate for a full-time employee you can give your candidate a small task to complete. For example, you can get them to write a blog article like this one, or social media to see how detailed oriented they are.

Hopefully this article has given you some helpful tips on how to hire superstars. Hiring top talent will do more than anything to boost your business and take it to the next level.

General Stats for Conclusion
SMALL BUSINESS AND THE ECONOMY
American Business is Overwhelmingly Small Business
In 2012, according to U.S. Census Bureau data, there were 5.73 million employer firms in the U.S. Firms with fewer than 500 workers accounted for 99.7 percent of those businesses, and businesses with less than 20 workers made up 89.6 percent. Add in the number of nonemployer businesses – there were 23.0 million in 2013 – then the share of U.S. businesses with less than 20 workers increases to 97.9 percent. Among employer C Corporations in 2012, 99.2 percent had less than 500 workers, and 86.2 percent had fewer than 20 employees.

The Small Business Share of GDP
A January 2012 report from the SBA’s Office of Advocacy found: “Small businesses continue to be incubators for innovation and employment growth during the current recovery. Small businesses continue to play a vital role in the economy of the United States. They produced 46 percent of the private nonfarm GDP in 2008 (the most recent year for which the source data are available), compared with 48 percent in 2002.”
Source: “Small Business GDP: Update 2002-2010”

Bulk of Job Creation Comes from Small Business
According to the SBA’s Office of Advocacy: “Small firms accounted for 63 percent of the net new jobs created between 1993 and mid-2013 (or 14.3 million of the 22.9 million net new jobs). Since the end of the recession (from mid-2009 to mid-2013), small firms accounted for 60 percent of the net new jobs. Small firms in the 20-499 employee category led job creation.”
See the Office of Advocacy’s “Frequently Asked Questions” publication.

Small Business Share of Employment
According to U.S. Census Bureau data, employer firms with fewer than 500 workers employed 48.4 percent of private sector payrolls in 2011, and employer firms with fewer than 100 workers employed 34.3 percent, and those with less than 20 workers employed 17.6 percent.
Data from the Census Bureau’s Statistics of U.S. Businesses can be reviewed here.

Small Business and Innovation
The SBA’s Office of Advocacy notes: “Of high patenting firms (15 or more patents in a four-year period), small businesses produced 16 times more patents per employee than large patenting firms.” In addition, a 2008 study by Anthony Breitzman and Diana Hicks for the Office of Advocacy (“An Analysis of Small Business Patents by Industry and Firm Size”) found that “small firms are much more likely to develop emerging technologies than are large firms. This is perhaps intuitively reasonable given theories on small firms effecting technological change, but the quantitative data here support this assertion. Specifically, although small firms account for only 8 percent of patents granted, they account for 24 percent of the patents in the top 100 emerging clusters.”

See the Office of Advocacy’s “Frequently Asked Questions” publication.
See “An Analysis of Small Business Patents by Industry and Firm Size” here.

Small Business and Trade
The U.S. Census Bureau noted the following about small and mid-size businesses in the international trade arena in 2013:

-“Small- and medium-sized companies (those employing fewer than 500 workers, including number of employees unknown) comprised 97.7 percent of all identified exporters and 97.1 percent of all identified importers.”

-“Among companies that both exported and imported in 2013, small- and medium-sized companies accounted for 94.4 percent of such companies.”

-SMEs accounted “for 33.6 percent and 31.1 percent of the known export and import value, respectively.”

-Among all U.S. manufacturers: “96.5 percent of manufacturing exporters were small- and medium-sized companies and they contributed 19.1 percent of the sector’s $839 billion in exports. 93.5 percent of manufacturingimporters were small- and medium-sized; they accounted for 13.4 percent of the sector’s $914 billion in imports.”

-Among wholesalers: “99.2 percent of exporting wholesalers were small- and medium-sized companies; they accounted for 64.8 percent of the sector’s $303 billion in exports. 99.1 percent of wholesaler importers were small- and medium-sized; they contributed 60.0 percent of the sector’s $593 billion in imports.”

Self-Employed Trending Down
Based on U.S. Bureau of Labor Statistics data, the level of entrepreneurship actually has declined in recent years. That is, the number of self-employed in the U.S. has dropped notably. Incorporated self-employed fell from 5.78 million in 2008 to 5.13 million in 2011, then climbing back to 5.48 million in 2015. So, after seven years, the number of incorporated self-employed remains well short of the 2008 level.

Unfortunately, the news is even worse when it comes to the larger measure of unincorporated self-employed. The number of unincorporated self-employed declined from 10.59 million in 2006 to 9.36 million in 2014. While incorporated data only go back to 2000, unincorporated self-employed numbers date back decades.

The 2014 number actually was the lowest since 1986. The level moved back up to slightly to 9.51 million in 2015. However, within 2015, the data turned down after May. Consider that the December 2015 level of 9.364 million was down markedly from the intra-year high of 9.968 million in May of 2015, and was off from the December 2014 level of 9.527 million.

See the Bureau of Labor Statistics “Employment Situation,” Table A-9, historical data.

Survival Rate for Small Businesses
According to the SBA’s Office of Advocacy: “About half of all new establishments survive five years or more and about one-third survive 10 years or more.”
See the Office of Advocacy’s “Frequently Asked Questions” publication here.

How Small Businesses Work, Background and Education

In June 2011, the U.S. Census Bureau released its 2007 Survey of Business Owners (Note: results of the 2012 Survey of Business Owners are scheduled for release in 2015), and it supplied some interesting information about how small businesses function, including:

• 51.6 percent of businesses were operated primarily from someone’s home.
• 23.8 percent of employer firms operated out of a home.
• 62.9 percent of non-employer businesses were home-based.
• “About 28.2 percent of firms were family-owned. These family-owned firms accounted for 42.0 percent of all firms’ receipts.”
• “Business owners were well-educated: 50.8 percent of owners of respondent firms had a college degree.”
• And 13.6 percent of business owners were foreign born

Are you ready to get started with the tool that made all these success stories possible? Learn more about our Small Business Sales Blueprint at www.smallbizdream.com today.

5 Simple Ways To Grow Your Business

You want to know how to grow your business. Everybody does. It’s unfortunate that most owners don’t know how to do it. The ideas are simple enough; it’s just the execution that can be difficult. You can find ideas all over the internet but we’re going to give you some ideas on how you can execute them.

There are some fundamental strategies that all business can take advantage of to drive your revenue and profits. A word of warning though, you should only pick one or two to focus on.

If you try to do everything at once, you’ll become overwhelmed and your focus will be too watered down for you to be successful. For instance, if you’re planning to have a tire shop business, decide on what your unique value proposition should be. Concentrate on it, and move towards diversification later on as your business grows.

Other strategies include maintaining customer loyalty like when you’re trying to boost your hair salon sales using a CRM tool to constantly follow up with your customers.

A word of warning: growth strategies do have some risk and they don’t always work, however with the right planning, execution and team buy-in, they can be used to expand your company.

1. Increase Your Audience
This sounds simple and straightforward and is often the first thing business owns think of when they want to grow their business. But it’s often difficult to expand your reach as it often means penetrating into a new market and taking customers away from your competition.

Execution

The easiest way to build your audience is to advertise—again it sounds simple enough. The easiest way to do this is through Google Adwords or Facebook advertisement. Both are extremely effective because they can pinpoint your audience exactly. You’ll want to test your ads against each other to know which ones are working best. This process is called A/B testing and should be used for all the ads you put together. Networking with current customers can also be an effective marketing tool to incentivize the sale and promotion of your products and services without spending anything on ads.

2. Improving Your Product
Another way of growing your business is by improving either the product or the service you provide. Think of Gillette razor. You would think a razor is just a razor right? Wrong! You can now get advanced, reusable triple-blade action. Do you really need three or even four blades? Not really but it is a way to offer a premium product for something that is relatively mundane and ordinary.

Execution

Think of one or two ways you can improve your product. It doesn’t need to be ‘the next best thing’. Instead think in terms of Gillette and just add a blade. It’s important to always be innovating even if you’re a common household product.

3. Expand Your Reach
Thanks to the internet, any small business can sell nationally or internationally. It’s fairly easy if you sell things on your website and you can expand your business further than your local area. You no longer have an excuse of not being able to find customers ever again!

Execution
The best way to do this is set up an e-commerce site attached to your website. If you don’t know how to do this then hire a web developer to do it for you. There are also third-party sites like Amazon or Shopify that you can sell on. It’s relatively simple to set up and the best thing is that you don’t need to carry extra inventory to sell online.

4. Diversify your Products
Apple was the leading personal computer company when they decided to branch into digital music. Think about what types of products complement your existing market. The product must make sense with your existing band and shouldn’t confuse your customers. If you’re a coffee shop it probably won’t work to sell shoes.

Execution

Out of all the ideas, this is probably the most difficult to execute. It requires lateral thinking that isn’t always intuitive. Do your research and find out what products are already on the market or innovate and find something new. Make sure your core business is secure and successful before venturing into unknown territory. You don’t want to extend your resources too thin.

5. Upsell To Your Existing Customers
The easiest sell is to your existing customers. They already know you and trust you. McDonalds is probably the most successful example of this with their famous upsell “Would You like Fries with that?” and “Would You like that Supersized?” These small upsells create millions of profits. What can you upsell to your customers?

Execution
It’s usually easy to think of ways to upsell, whether it’s a warranty or dessert or something else. The toughest part of this strategy is getting your staff to buy into it and getting them to offer the upsell to every customer. If you don’t explain it properly, your staff often feel mechanical or part of a cog.

I hope this blog has given you some ideas of ways to grow your business and increase your sales. It’s important that you keep track of your customers and build good relationships with them. We have developed a CRM app to handle all that for you. Visit us at www.smallbizdream.com to learn more.