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.

The Secrets to Selling More

We recently carried out a survey and got some real insights into how people are coping with the current business climate. Many thanks if you’re one of the business owners who've completed it.

What you told us is that business growth is a challenge and over 79% of you were looking for more customers. Getting new customers is one key piece of the puzzle that makes up your sales - but it might not be the most important piece.

The way to think about your sales or turnover is to break it down to its different elements. These are:
- Customers
- Price
- How often your customers buy from you
- How much they buy at one time
- Defection rate ( ie how many of your customers return time after time?)

If you’re always chasing new customers then you might just be pissing off your loyal customer base. Have you ever been annoyed by the great deals new customers get from, say, your telephone provider? Or bank? Or insurance company?  You might just be doing the same thing to your valuable customers because you don’t give them enough attention and you don’t do enough to develop customer loyalty.

Why do your customers leave?
The reason they leave and go to your competitor is down to the perception they have of how you treat them. And - that is you don’t care enough about them - 68% of the time that’s why your customers leave.

So just maybe you’re looking at the wrong thing! Do you have a loyalty scheme or offer them something that new customers don’t get? Do you thank them for being customers? Do you even like them? I hope you do and let them know.

It may be costing you a lot of money if you’re losing customers – and you might not even know you’re losing them. Do you measure this?

If you kept 95% of the customers you have and turn some of them into raving fans how much easier would it be to attract more sales?

What ideas could you come up with that would keep your customers loyal and help them spread the word to their friends, family and contacts? Take some time out and come out with some ideas. Let your imagination run riot!

Next blog I'll take you through how to price your product or service and how this can make a huge impact on your profit- in no time at all.