The Four Ways to Grow Your Business

Step 4 – Increase Effectiveness of Processes Within The Business

This is the last, but definitely not the least, way to grow your business. This is the step that ties it all together. To accomplish thie previous three ways we’ve talked about, you must make sure that certain processes operate efficiently within your organization. Without changing and improving the way your business operates, it will be very difficult to successfully implement the strategies we’ve talked about.

Let’s discuss briefly some of the basics of improving your business’ internal processes:

Increase Process Effectiveness – Develop a Mission and Goals

Understanding the real nature of your business and establishing its overall mission can help you build better processes. Once you have a mission statement, everything you do and say must support that mission. It can help guide you in developing a business plan, and in goal setting. It will also build understanding and trust in your customers’ minds and give your team members clearer direction.

Increase Process Effectiveness – S.W.O.T. Your Business

S.W.O.T. translates as Strengths, Weaknesses, Opportunities, and Threats and a S.W.O.T. analysis is an assessment of your current business environment. When you do this you end up with information on your industry, on your customers, on your competition, and on all your business operations; and when you know all these things, then of course you are in a much better position to improve your problem areas, and ensure that you use your strengths and opportunities to full advantage to win more customers, keep them coming back and spending more each time.

Completing a S.W.O.T. analysis can help you improve your processes to make sure that the first 3 ways to grow your business are head and shoulders above your competitors’. It’s one of the basic techniques businesses who want to grow use to understand how they can leverage their strengths, remove weaknesses, make the most of opportunities and avoid threats in moving their business forward. And a S.W.O.T. also forms an important part of any business plan – and I believe any business that is interested in growing absolutely needs a business plan to work to.

Increase Process Effectiveness – Work ON Not IN

Do you ever feel that you’re stuck day in and day out handling the myriad of little things that pop up in addition to taking care of regular operations? Well if you keep doing that, you certainly won’t have the time to implement any of the ideas we’ve talked about today. By working ON your business instead of IN it, you’ll be able to step back from the day-to-day activities and look objectively at your business as a whole – and what needs to be done to help it grow.

One of the most profitable things you can do as a business person is to sort out the things you could do in your business to free up more of your time to work ON rather than IN it.

Increase Process Effectiveness – Systemize Processes

One of the first things you can do to free up more of your time and make your business run more smoothly is to systemize every process that needs to be completed to serve customers and generate profit. We’re talking about mapping out and documenting every single step of every single task – from answering the phone to closing up at night.

Edward W. Demming (redesigner of the Japanese car industry) completed a study that showed that only 4% of business misakes were due to direct human error. The other 96% were due to a lack of consistent systemization.

Systems clearly spell out what it takes to run your business. Documenting those systems can help to train team members, delegate responsibility and create consistency. This all works to your advantage because:

  1. You now have more free time to do the things you want to do, and
  2. It makes your buisness more valuable because it doesn’t have to depend entirely on you to operate

Increase Process Effectiveness – Build a Team

Understanding why the word ‘team’ is so critical could improve your business processes and your working environment dramatically.

Creating processes within your business can allow you to delegate more to team members, making them feel valued and giving you more free time to work ON your business rather than IN it. Building a business based on functions rather than people can help you too. Instead of building jobs around specific people, focus on the functions first and match them with the right people.

Training is an important area for improving processes and keeping good team members. Building team members’ skills is the only way to implement change in your business effectively. Whether it’s how to answer the phone, computer skills, customer service or financial recordkeeping, it is extremely important to the ongoing development of your business to ensure that your team members are trained and challenged.

The Power of Synergy

These 4 ways work best when used together in an overall strategy. Think about the concept of synergy – the whole is greater than the sum of its parts. The mistake many companies make is to focus on just one of these 4 ways, and thus miss out on significant growth opportunities.

Let’s look at a dramatic example of how the 4 ways can work together for you.

Making All 4 Ways Work for You

  1. Let’s say you have a customer base of 1,000.
  2. You are able to increase the number of inquiries (and thus new customers) by 10%. This means your customer base would increase to 1,100.
  3. You are able to increase the number of times each customer purchases from you during their lifetime by another 10% (e.g., from once to 1.1).
  4. You manage to increase your average sale (or transaction value) by 10%, taking it from $100 to $110.
  5. Improvements in your business processes have allowed the first 3 increases to occur.
  6. Here you see that I’ve increased each factor by 10%. What will the result be in terms of increased profitability – will the overall business grow by 10%?

In fact, something completely different happens. Something that could mean the difference between a profit and a loss, between a comfortable lifestyle for you and a wealthy one. Increasing all areas at the same time has a multiplier effect resulting in an improved profit of not 10% but a staggering 33.3%! That’s an increase of $33,100 in income as a result of the synergy of all areas improving together.

So, you see that focusing on all 4 ways to grow your business is the best way to achieve maximum results.

Summary

So now we’ve looked at the four ways to grow your business:

  1. Win new customers
  2. Get customers to purchase more often
  3. Increase your average sale
  4. Improve the processes within the business to ensure the success of the first 3 ways

We’ve discussed some of the key strategies within each of these 4 ways that you can use to make your business more valuable. And we’ve looked at how the 4 ways work together. For ways to help your better grow your business, give us a call at (416) 803-5638.  

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