The Twelve Building Blocks to Growth

Is this a challenging time for your closely-held business? Are your customers more sophisticated and price sensitive? Do they expect your products and services to be delivered faster, cheaper and more conveniently (and they have no qualms about switching to competitors?) At the same time, does your company seam to have lost the momentum you had in the early years of your business? Have you recognized that while you have had some banner years, you find it increasingly more difficult to repeat the feat year in and year out? Are you unsure how to increase growth beyond the status quo?

More and more this scenario describes business owners like you. This inability to sustain growth for any appreciable length of time is a common trait of closely-held businesses, but it doesn't have to be like that for your business. Most often, much of the problem stems from the business owner falling into the rut of “doing it, doing it, doing it” – that is, they become too involved in operating their business and don’t spend enough time “working ON their company.” Does this describe you?

When you started your business, you probably spent hours figuring ways to make your business grow, on getting more customers, on developing systems to help you maximize your limited resources. In other words, working ON your business. But as time went on, slowly you got sucked into the “crisis of the urgent.” You started to manage the business and lost that entrepreneurial spirit. The solution: free up time to focus your attention on delivering more value to your customers, on building the internal systems that will lead to competitive advantage, and start working ON your business again.

The first step to getting back that spirit and to create sustainable growth is to focus on what’s important. That is, on the Building Blocks of Growth. There are really only a dozen questions you need to answer to grow your company. Continuous focus on these Twelve Building Blocks of Growth will help you grow and sustain that growth year after year.

1. How can you increase sales of the same products to your existing customers? Some possible answers lie in new advertising efforts, increasing customer loyalty, adjusting prices to boost volume and net revenue, and introducing existing customers to other company products.

2. How can you increase the number of customers (of the type you want)? In other words to sell existing products to new customers. Some possible methods to increase the base of targeted customers include developing strategic partnerships and bundling products together in ways that might appeal to new customers.

3. How do you increase the transaction frequency for each customer? How do you get existing customers to buy more often? Some possible methods include decreasing the package quantity of your product into smaller sizes, make special offers, or provide accessories that encourage more frequent purchases.

4. How do you increase the value of each transaction? In other words, how do you get the customer to spend a little more each time they buy from you? Some possible methods include offering volume discounts, extending “buy three get one free” offers, bundling products together, or raising prices.

5. What new products or services can you introduce? Examples of appropriate strategies include extending or modifying existing products or services to fill gaps, licensing complementary products from outside sources, or developing new product lines.

6. How can you modify existing products to sell more of them to existing customers? Some methods include upgrades, new features, new colors, etc.

7. How can you expand sales by developing better delivery systems? Ideas include adding new channels of delivery such as the Internet or direct marketing. In addition, ask your team to find new ways to modify the existing delivery system to save time and money. Don’t be afraid to partner with outside vendors.

8. What other internal systems can be improved to build competitive advantage? Some ideas include utilizing the Internet to better communicate, integrating the entire company through a digital network system, or installing more sophisticated customer services systems. Look at everything. Map out all your systems. Determine which ones add value and which ones cause bottlenecks and problems.

9. Into which new geographic areas can you expand the business? Expansion might mean going global. It might mean creating new sales offices or it might mean adding more sales people to improve the penetration of each existing territory.

10. What opportunities exist outside the industry? Into which other industries can your company expand? What skills, knowledge and processes do you possess that might be a competitive advantage in other industries?

11. Are there other uses for your existing products? For example, a salt company expanding from its food product line to include salt for melting snow.

12. What acquisitions can you make vertically or horizontally to open new opportunities for your company and its products? Some methods include buying a retail chain, buying a competitor, or distribution network.

By working ON your business, growth almost becomes inevitable. Relying on the Twelve Building Blocks to Growth will revitalize your company and help you rediscover the energy you need to sustain growth year after year.

Brett Flickinger is the Director of Marketing for the accounting and consulting firm of Dugan & Lopatka, CPAs, PC in Wheaton.

By Brett Flickinger