What stops your Business from growing?

In our recent Business survey nearly 50% of you said you found growing your business a real challenge. But what is it that’s stopping you from growing? Sales or increasing your turnover is a real issue and my last four blogs have covered that issue.

What about cashflow? 26.2% of you mentioned this and 9.8% mentioned it was a struggle getting paid. So let’s assume that cashflow is not just linked to lack of sales but to other issues we all face, like:

• Having to wait 30, 60, 90 days or longer before you get paid and sometimes not getting paid at all
• Too much money spent on running your business and not knowing how to cut that expenditure
• Lack of funding from the bank and not being able to get help when you most need it

What if you could do things differently which means you get paid faster? Would that help your cashflow? I want to share some stories of business owners doing things a different way and getting great results.

If you’re not in the sort of business where you get paid straight away for your product or service you might find you have to wait months before you get paid. Your bloody customers just don’t understand that you’ve had to pay out for materials or rent or wages. Well don’t be too quick to blame your customer. After all who set up the terms and conditions? Who said you had to offer 30, 60, 90 days credit?

You might think it’s the norm within your industry but you know what your customer might not have that same ‘norm’ within their brain. One hynotherapist I know would take bookings for a course of hypnotherapy sessions and her ‘norm’ was 50% upfront, the rest payable in equal instalments at each subsequent session. When she changed one sentence she got a lot more money more quickly. Instead of asking for the 50% deposit, she said ‘how much do you want to pay today?’ Most of her clients paid the full amount!

I would suggest to her going one step further – change the terms and conditions to 100% upfront. She then has the flexibility to offer payment terms, if necessary, while most of her clients paid in advance. Do you set up conditions that mean you don’t get paid as quickly as you could?

A graphic designer, when she set up her business, gave her clients 30 days to pay once the work was complete. However the major frustration she had was that many times the client stalled the work while she had to wait for their feedback before she could complete it. So not only did the work drag on for longer but she couldn’t get paid until it was all done. I suggested she put in a plan to get paid in instalments over the period of time she expects the work to take.

She asked for a deposit of 50% and then agreed instalments and dates with the client before the work went ahead. She got paid much faster and clients were less likely to stall the work as they were paying for it whether it was finished or not. By changing her conditions she didn’t lose a single client, she got paid faster and her workflow was smoothed out.

So don't hide behind the excuse that in your industry it's just the way it is. There are lots of Business Owners doing something that little bit different from the 'norm' and as a result making more profit, getting paid faster, and getting more freedom.

More sales for less effort

If you think of what you do as solving a problems for your customer, what other problems could you be solving for them? And what sort of impact could that have on your sales? You surely know by now that I’ll want to talk you through some figures! Let’s have a look, and I’ll use the same figures as my last blog. Your sale is £50 and your customers buy on average 4 times a year (but you’ve now increased this to 5!). However let’s just stick with 4 times just now. If there was something extra that your customers could buy at that point, and it might be an extra £5, that’s £20 per customer. You’ve got 500 customers so that an extra £10,000 in sales. That’s the equivalent of another 50 new customers.

Now I know it’s easy to come out with figures and I don’t really expect all your customers will buy more every time. But can you see how this is worth considering?

It could be that you offer different levels of service to different customers and that’s how you can increase the average spend. There is evidence to suggest that 10% of customers will always buy the most expensive option. If you don’t offer them alternatives you could be leaving a lot of money on the table. Or they may even go elsewhere for that premium service or product.

We’re all familiar with the upsell, for example:

MacDonalds – ‘Do you want fries with it?’

Restaurants – ‘Would you like a drink while you’re looking at the menu?’ ‘Would you like a dessert/coffee?’

Airport parking – ‘Do you want us to park your car for you?’

Hairdressers – ‘Would you like a treatment to keep your colour longer?’

There’s a whole load of others and I’m suggesting if you’re not doing it in your business then you are not solving all of your customers’ problems. Some of your customers are really short of time and would appreciate something to help with that. Some of your customers trust you and are happy to buy more things from you. Some of your customers like to have the best quality. So why not help them?

To be frank if you don’t help them they may think you just don’t care enough and go to your competitor anyway. And you don’t need to provide it all yourself. There may be a like minded business owner you can join up with and recommend (for commission or not) to your customers. They in turn may well return the compliment.

By thinking in a slightly different manner you might not need so many extra leads or new customers. It’ll cost you less to use your existing customer base, you can do it in less time and you can strengthen you customer relationships at the same time.

More Secrets to Increasing Sales

So how do you get existing customers to buy from you more often? I don’t know your specific circumstance so I’ve got to be pretty general here to try and cover as many bases as possible. But if you look at the maths (I’m pretty keen on this!) it could make a real difference to the sales and profits of your business.

Say you have a product/service you sell for £50 to your customers on average 4 times a year. What happens if you can get them to buy once more from you? That’s £50 more from each customer and you only need 4 of your already happy customers to buy once more from you to replace a new customer. If you have 500 customers then  that’s £25,000 in extra sales right there. Can you see why this could be really powerful?

So how can you go about this?

If you’re in retail and you sell to consumers there’s lot of things you can do and I’m sure you’re already doing some of them. For example if you have a seasonal sale and offer extra discounts to your loyal customers. This could be enough to encourage them to come back to you for some extra bits and pieces they wouldn’t normally have bought.And might just give you the opportunity to sell something else to them while they're there.

A general one we can all use is send a newsletter to keep them informed of what’s new (or the new lines you have) and how you can solve a particular problem they might be facing. You may be able to give them some tips that will generate some thoughts about how else they can use you.

You might even be in the type of business where you can give them a call when you know they may be running out of a particular product. Or you know they have a challenging situation you could help them with. This can be used by personal services too eg hairdressers, dentists, beauticians, gyms/trainers ('hello, haven’t seen you in a while').

None of this is rocket science it’s really just looking at ways we can help customers, because after all we’re here to solve their problems in some way or another.

Next time I want to look at increasing customer spend and how you can increase your sales by solving more of their problems (and perhaps ones they didn’t even know they had!)