Fact: Most businesses never reach $1 Million in annual sales. They start small and end small. While you can certainly create a great income with lower revenues, depending on your net profit, it's also true that staying small does not necessarily ensure that your business will survive.
There are no guarantees in business or in life! Every entrepreneur is faced with the risk that all their hard work and sacrifice will go belly-up. You have two choices for dealing with this uncertainty-shrink and survive, or survive through evolution and growth.
If you increase your annual revenues, you'll find you have more options. You'll be in a more likely position to ramp up your advertising or fund your own growth. There's also the old saying, "Revenue covers a multitude of sins," meaning that you don't have to have a perfect business to do well, as long as revenues are high and cash flow is healthy.
If times get tough and people aren't buying as much, you'll have your savings to weather the storm, your revenues will have room to decrease without putting you completely out of business, or you may have the cash on hand to get aggressive and attack your way out of the slump. Plus, you'll make more from the sale of your business, after all your hard work.
Whereas, if you stay small in order to keep things more manageable, it is often just a case study in shrinking back within the confines of your comfort zone. Yes, I know, you're a fearless entrepreneur and nothing daunts you, but let's get real here. Everyone has a comfort zone, and the fulfillment of dreams rarely happens within their limited boundaries. You will have to grow ahead of your business.
So with the mindset of achieving and maintaining fast growth, here are some tips for forming a growth strategy of your own.
Start with the most common ways for a smaller company to grow. Each of these involves some risk, effort, and uncertainty, though less than with other growth strategies. I suggest choosing and working on one of these at a time to stay focused and minimize the risks.
These strategies are as follows:
1. Sell more to your existing customers
The growth strategy with the least risk is continuing to sell more of your existing products to your current customers. You can do this by offering upgrades, maintenance and service packages, or finding new ways that your customers can use your product or service.
If you can't figure out what else to sell to your customers, try this - ASK THEM. Yes, it's really that simple.
2. Attract new customers
The next straightforward way to grow is to sell more of your product to adjacent markets-customers in different cities of states, or business buyers in related industries.
3. Additional sales and marketing channels
This could mean making sales through new channels-such as online transactions if you're a brick and mortar store or selling clothing at fairs and shows instead of strictly online. Or, you can advertise the same products through different lead generation channels, like pay-per-click, direct mail, etc.
4. Offer new products
Creating new products to offer existing customers is one sure-fire way to make more sales without having too much risk-compared to making new products for new customers.
Think of new, related ways to meet their needs, or meet them better, or more easily. Try personalizing. Different colors. And, once again ask them what they want so you can give it to them!
5. Growth through acquisition
Another way to grow is to acquire other companies, though this is usually more capital-intensive. In addition, often-times mergers and acquisitions fail to deliver the full value predicted for them.
Nevertheless, keep your eyes open for opportunities to buy competing businesses (especially if they're in a tough spot), or buying out one of your suppliers and even distributors to pass the savings through to your bottom line.
I hope you choose to grow your business versus staying small, and that you grow through one of these proven strategies. The horizon is constantly changing, and changing with it is a reliable way to stay ahead of the game and in a strong cash position.
Suggested Resource: Would you like to know more ways to maximize the value of your business. And specifically to turn it into one that exceeds $10 million in revenues? Then check out Growthink's 8 Figure Formula. This video explains more.