With the digital age upon us, entrepreneurship has never been more accessible to the average American. According to an article by NPR, by September of 2020, applications for employer identification numbers (EIN) had surpassed 3.2 million for the year, up more than 500,000 compared to the year before.
However, accessibility does not correlate with success; far from it in fact, as there are lots of pitfalls and missteps that can make businesses fall off their trajectory or lose steam. I often think running a business is analogous to exercise: success comes from long-term persistence and discipline, rather than small bursts of high energy. You might have once made a cool video with tons of engagements but what else have you done more recently? You need to be making consistent progress across all facets of your business (Sales, Marketing, Operations, HR, Finance, etc.) over a period of time to make a genuine difference to your business outcomes.
In my experience, successful businesses need to follow a process of build, grow, and stabilize; I’ve written this article to help entrepreneurs understand how to support the growth of their businesses through each of these phases. While this is clearly an oversimplification of the process, I believe that it will provide you with a framework around which you can plan your most pressing business activities.
Every entrepreneur knows that when they are building a business, they need to have something that stands out from their competitors. Whether it’s an innovative new product, a more convenient option for their buyers, or simply a location advantage, every business needs something that stands out, hence the “build” concept. If you jump into sales too early without understanding your market, you are likely setting yourself up for failure. You’ll probably spin your wheels trying to sell something that isn’t unique, and at startup volume, you’ll never be able to compete on price with more established competitors.
Instead, consider spending significant time ensuring you offer your audience something special or different before you invest too much in business development or marketing activities. Once you’ve built something great, then it’s time to spend significant time focusing on selling it. That’s not to say you shouldn’t still try to find some avenues for quick sales wins at the beginning: just don’t over do it or you might burn out.
When you’re happy with your offerings and see a unique opportunity to stand out among your competitors, it’s time to double down on your business development efforts. Whether it’s through sales or marketing, it’s important you know your target audience and have an educated guess on how to best reach them within your financial restraints.
Your messaging should focus on your value differentiators, which are the elements of your business that are of value to your customers but not offered by your competitors. These differentiators will allow you to stand out from the pack immediately when presented to your prospects. Some won’t be interested in these elements while others find them to be exactly what they’ve been looking for. This second group is who we want to attract and know more about, as they will be your best source for online shoutouts, reviews, and most importantly of all, referrals. When you begin to get enough of these rockstar clients that it starts becoming difficult to fulfil purchases, it’s time to look at the next phase.
Congratulations, you have the problem that every entrepreneur wants to have: too much business. Your current processes and operations are struggling to support your current workload and you’re starting to see cracks within your sales pipeline; the trick is to fix them before the pipe bursts. The pipe bursting is an analogy for a drastic reduction in customer retention due to an issue with the business; for example, customer service. Your receptionist, who was once proactive, friendly, and helpful is now overworked to the point where they are direct, impersonal, and resentful. This decrease in service level could lead customers to look for alternative solutions. As the business owner, your job is to correct these growing pains before they get out of hand and fix the pipe.
So, what’s the answer? There are always many ways to fix the pipe, but consider this one: you could hire a team of intake professionals and have the long-time receptionist manage the team. This solution provides growth within your company for your long-time receptionist and offers you value in direct experience of how to do the job effectively. Opportunities like this are all over your business and it’s critical you stay attuned to what’s working and what’s not as you grow. If you don’t, the business is yours to lose.
You’ve spent significant time stabilizing your business and now have a regular flow of customers. Okay, so now what? Many small businesses may be satisfied with their current size and revenue, and there’s nothing wrong with that. For those entrepreneurs still looking to grow, it’s time to build again. In this phase, I refer to the Ansoff Matrix. The matrix outlines the four ways to grow an established business; market penetration, product/service development, market development, and diversification. Whether you’re selling new products or services to the same audience or existing products to new audiences, the answer will be one of the four outlined above. Go back to understanding the unique value differentiators you uncovered at the beginning of your initial growth phase and think about how to best build on that success. It’s likely you’ll have both successes and failures but if you continue with the same level of persistence you started with, you’re sure to find a winning solution that brings more revenue to your business.
From there it’s rinse, wash, and repeat until you’re tired of making money!
Learn more about scaling your business from Take the Stairs
This concept may seem simple, but it’s like most concepts: the reality is usually a lot more complex. There’s a lot of hard work and uncertain decisions to be made along this path. Our goal as an operations consulting firm is to help entrepreneurs and business owners like you to better understand the climb you’re up against so you find a way to enjoy the journey. If you have any questions about this concept or scaling your business, set a discovery meeting with our team today.