No. 3 March 2013

Growing a business is a subject most business owners are quite interested in.  Curtis Alexander, a business growth strategist www.curtismalexander.com wrote an interesting article recently about why some businesses grow and others remain stagnant. 

Alexander proposed in his article that there are only three ways to grow a business: “(1) Get more customers.  (2) Get those customers to spend more each time they buy.  (3) And get those customers to buy more often.”  He goes on to state that “if you optimize each of the three drivers by 10%, you will end up with a 33.1 percent overall increase in revenue.”   Here’s his math:  “If you have 10,000 customers, each buying $500.00 per purchase per year times 2 purchases per year equals $10 million in yearly revenue.  Now boost each driver by 10% resulting in this new math:  11,000 customers each buying $550.00 per purchase times 2.2 purchases per year equals $13,310,000 or a 33.1% increase in revenue per year.”  Whether you use these numbers or use your own business’s numbers, Alexander concludes that “this is the power of small, incremental optimization.”

But wait a minute, you say.  How am I possibly going to be able to grow 10% in each of these areas?  Alexander’s answer is this:  “I don’t know one way to grow a business 100 percent a year.  But I do know 100 ways to grow a business by 1 percent a year.  Add those up and you have a big improvement.  The trick is to take your blinders off and realize that you don’t have to invent anything new.  You just have to do lots of little things better, more efficiently, and more profitably.”  For instance, are you running your most successful ads in many different media outlets?  And not rerunning ineffective ads?  Are you quickly following up new customer leads?  Do you need to experiment with a selling price?  Sometimes increasing a price will increase sales better than lowering a price.  Can you bundle another complementary product with a current offering to increase interest or the impression of better value?  If you held a sales training class for some of your employees, would they sell more as a result?”

Opportunities abound to grow your business.  It means looking for growth opportunities all the time in order to do lots of little things better, more efficiently and more profitably.  The results on your “top line” and your “bottom line” might just surprise you.

Richard Branson, founder and chairman of Virgin Group, said that “my mother always taught him never to look back in regret but to move on to the next thing.”  He said what amazes him is “the amount of time people waste dwelling on failures rather than putting that energy into another project...  A setback is never a bad experience, just a learning curve."  Another way of saying this is if you have a setback or make a mistake, seize the opportunity to be educated.

Harvey MacKay also thinks making mistakes is a great learning opportunity.  He says, “To be successful, you must come to terms with the notion that you will make mistakes.  In fact, you often need to increase your failures to become more successful.  Mistakes don't make you a failure. I always say, if you want to triple your success ratio, you might have to triple your failure rate.

             

Mistakes are okay as long as you learn from them and don't repeat them.  As Confucius said, ‘A man who has made a mistake and doesn't correct it is making another mistake.’   I say it a little differently:  One mistake will never kill you.  The same mistake over and over will.

             

This concept is perfectly illustrated in the story of the fellow who was explaining to his neighbor how he got a burn on his right ear.   ‘I was getting ready to iron my shirts and the phone rang.  I picked up the iron by mistake.’

             

The neighbor replied, ‘Well, then, how did you burn your left ear?’

            

‘The same guy called back five minutes later.’”

Remember, if you learn from your mistakes, one ear will always remain unburned.