One of the best things I ever did to grow my company to the top 4% of small businesses was to hire people smarter than me. I recommend doing this in as many areas as you can as soon as possible. Early on in my first successful business (I own three), I spent six figures on hiring people to teach me all areas of growing a business. Through Femme Meets Fortune, I now offer online courses, group coaching, and individualized coaching to clients worldwide. Check out my confidence course to get started!
Some of the initial things to understand in small business are your goals and with your goals… a plan. Do you have a clear understanding of what you want your business to look like in 3-10 years? How much time do you want to work? Who do you want to serve? What do you want your lifestyle to look like? In considering these questions, let’s talk a bit about end goals versus means goals.
When most people set goals, they think about what are called “means goals.” An example of a means goal is money. For example, you might want to have a million-dollar-per-year business. That would be a means goal. End goals are different. An end goal is more exact as to what you want to have. For example, if you want to have a million-dollar business, ask yourself why. Why do you want this sort of money? Is it to travel? Is it to send your kids to college? Is it to buy a bigger house? Often when we more clearly define the end goals, we can open up possibilities of means goals. Many times, when people do this activity, they wind up finding that they can actually reach their ends goals by many different means. It can often mean that less money is needed. This is important in the early steps of building and designing a small business, as a business that brings in a million a year is quite a bit different than a business that brings in $250,000 a year. This will be a different strategic plan and therefore should be thought about.
One of the next things to consider once you have this concept in place is your offering. If you decide you want your company to make $250,000 a year, how much of that will be going to overhead? What is your actual take-home pay? Can you meet your end goals on that? If not, you will need to change your goals.
Now that you have your goals more clearly defined, you need to make sure that you understand what this means on a monthly, weekly, and daily basis. If you want to make $250,000 a year, what does your business need to do in a day? This understanding will help you know if you are on track way before you get to the end of the year. When you know if you are on track, you can then alter your marketing strategy accordingly. Your numbers are literally the lifeline of your business. Not knowing them is a big reason why many businesses do not make it past five years, and even more do not make it past 10 years.
Okay! So now that you got this, the next biggest thing is analyzing your offering. What do you make on average per sale, also known as the average customer lifetime value? If you do not know this, you are in big trouble with running your business. You will have a wide variety of numbers here. Maybe some customers spend $100, and others spend $10,000. While this is a big spread, you want to know if you average it out, what you make per customer. By knowing this, you can then work to see how many customers you will need in a month, week, and day to meet your annual goals. After you get this figured out, you will then want to analyze how many hours of yours go into delivering the product or service to the customer. Many people when they do this find that they do not have the hours needed to get to the level they want. Once you know this you have three choices: hire help, raise your prices, or put in more time. You will never be able to meet your goals without doing one of these, so make sure you have a plan for it. If you plan on hiring help, how much money will this new hire likely need? Are your offerings priced at a level that you will be able to hire that person and still pay yourself what you need? If not, you are once again in a position of needing to raise your prices.
How to Grow a Small Business:
Marketing and Advertising
When it comes to basically anything in business, you will want to understand numbers. When you know your average lifetime customer value as explained above, you will understand better how to use your marketing dollars. For example, if you learn that your average lifetime value of a new customer is $100, and you spend $200 on an advertisement and get only one customer out of it, you have lost money and you want to stop that advertisement. But if you have an average customer lifetime value of $1,000 and you spent $200 for that customer… well that looks pretty good. Literally the same advertisement could be good or bad for your business based entirely around what these numbers are. This is an example of how to use your numbers to grow your business.
We teach a lot of things about how to gain more confidence in growing your small business in our confidence course. You can check that out HERE. If you are learning how to grow a small business and do not have a good business coach yet, I strongly recommend that you hire one. Yes, it is an investment. But it is an investment that pays off in dividends. The best thing I have done in life that has guaranteed the success of my small business is by hiring coaches that are ahead of me and by hiring employees that are well versed in things that I do not know. The more that you can grow the team of those who are smarter than you in certain areas, the more you can laser focus your efforts on what you do the best. Work smarter AND harder. Make sure that you are making business-related decisions by understanding your numbers, the lifeline of your business. Intuition and gut feelings absolutely have a wonderful place in business. But validate your intuition by fact checking with numbers and data and this will help you stay on track for your growth.
To Your Success!