So, in today’s video, I wanted to talk about why there’s a right and wrong way to grow your business. So, really there’s four different ways you can grow your business. By business, I mean your profits. So, even if you decide to make your business smaller, per hour you’re working you really want to be earning more. Profitability is where you really want to achieve the growth.
So, the four different ways are, you go to an existing customer, put your prices up, or you could go to an existing customer and sell them more. You could go and find new customers. And really, the fourth way is you can have a look at your costs, see what you can cut down, on and hopefully improve your margins that way. The reality is, for a business to grow you need a bit of all of them. But there’re some ways to grow your business that are much better than others and I wanted to just talk about why they’re better than the other ways.
So, let’s talk about the worst way. Well, looking at cutting your costs is, on its own, is absolutely fine as long as you’re still thinking about growing your business when you cut those costs. You don’t want to be cutting costs that your business really needs. Without them, you can be held back from growing in the future. And also, one of the things about cutting costs in a business is the opportunity to cut costs in a business are often quite limited because the chances are you probably were a responsible business owner anyways, so didn’t let them get out of hand.
So, the other way is, you could go find more customers. But finding more customers takes time, and effort, and money in terms of marketing. So, that’s good, but not the best way. And also, when you do bring on a new customer, you’ve then got to build a whole new relationship with them. So, really, the best place to really grow your business is look at your existing customer base and work out if you can charge them more, and if you can sell them more.
So, in terms of charging your customers more, you’ve got to do a lot of research in terms of what your services and offering are really worth. And more importantly, what your solution is really worth. That involves looking at what your competitors are doing for the same amount of money, or for more money, and making sure whatever you do is in line with that. However, you should definitely be able to charge more than your competitors, but you’ve got to make sure your customers understand why you’re so much better than your competitors as well. So, it’s about demonstrating value. You can’t just go in for price increases without demonstrating real value, because all you’ll do is you’ll annoy your customers, and then you’ll end up with less of them and that could damage your business.
And also, the other area where you can really improve your margins is just by selling more to your existing customers. So, to do that, you’ve really got to be looking for new products and services that you can bring out to your client base that they actually need. So, quite often, when you’ve got options to grow your business, the best options are the ones that are based on your existing customers because you already know them. You’ve already done a lot of the work. You can give them… And you’ve already got that relationship. So, you’ve already got your foot in the door. So, that tends to be the best way to grow your business. However, if your business is tiny, then I completely understand that you need to go down the route of getting more customers. And if your business is gigantic, it might be that, over the years, your costs have become really inefficient, so it is worth looking at that as well.
So, at N-Accounting, we support our clients in growing their businesses. So, we do all the tax work, but we also work with them on their plans and help them understand the margins and pricing. So, what I’d like to offer you is a free game plan session. If you’re looking for a good way to grow your business and you want some support and a strategy on how to do it, then we’re the people that can help. So, book yourself in for a free game plan session, there’s a link at the bottom of this video, and we’ll talk about the next steps involved in getting your business to where you want it to be.