One of the biggest challenges for small business is figuring out how to grow your business, especially in the beginning. The problem is that the desire to grow your business can turn into “grow at any cost” and that’s a dangerous position. Growth can be deadly to your business if you don’t first weigh the cost of that growth.
That cost can come in two forms:
- The expense of the development strategy itself, and
- The cost of ramping up your business with inventory and/or personnel to meet the demands of increased business.
In this article, we’re going to look at the expense of the development strategy itself. It really is the second thing you should consider, though. Fast growth can cripple a small business if there isn’t enough cash flow to fulfill on the sales. First determine how much growth your business really can stand.
Assuming that your business is able to handle new clients and/or sales, now let’s take a look at the business development strategy itself. A good rule of thumb is that you should expect to receive 5 times gross income (in other words, sales) for the amount you spend for promotion, marketing and advertising. In other words, if you spend $10,000 in total to put a new business development strategy in place, you should expect to receive $50,000 in new sales.
If you’re the typical small business starting, growing or even just surviving in a tough economic market with little or no credit, you also need business development strategies that don’t eat up your cash flow. There are plenty of people happy to sell you tens of thousands of advertising space, but can your business afford that? And what if the campaign doesn’t work? You’ve just used up some hard-won cash from your small business.
The best business development strategies are ones that take little or no cash flow.
Here are nine high impact, low-costs for your business:
- Get noticed. Small business often start with an entrepreneurial urge to do something better than anyone else has done it before. That’s working in the business. And to a certain extent, you need that. But, in today’s world, it’s highly unlikely that the world will beat a pathway to your door based on something great you’ve done that no one else knows about. Some ideas to get you started: Write articles, post a blog, build a social media platform or press releases. It’s possible to get noticed in today’s world for little money. The trick is to stand out above all the other noise. The best way to do that is to provide solid content. Each product and product line must stand on its own merit. There is no room for dogs in a bootstrapping company. Unless, of course, you have a pet grooming business.
- Have a good accounting system in place so you can quickly make business management decisions. If something is working, then put more money into promoting that item. If something isn’t, cut it quick.
- Create a sales funnel. The sales process resembles a funnel. At the top end, the widest part, are the people who are just finding you, checking out their options, considering using your services or buying your product. If you can adapt your product or service to match the funnel, you can often pick up sales. For example, at the top, where the funnel is widest, you may want to offer an entry-level product or a special report at a reduced price. This may help you to capture some of those people who otherwise may not have gone past the looking point.