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How to grow your business

When I first became an entrepreneur, I had no idea how hard it was to get customers.  I thought if you make a great product or have a great idea then people will buy it from you.  Over the course of founding 5 companies and working with many companies I have determined there are 4 steps to grow your business – and by growth, I mean profitable, long term growth.

Step 1. Get your first 10 customers – tell everybody what you do and try different things and see what works

This is what new entrepreneurs need to figure out.  Usually to get your first customers you have to give them something free or pay for ads on Google.

If you are B2C business then I would start with Google Pay Per Click.  When customers go to google they have the intent to buy since searching.  Start figuring out what keywords work the best and keep testing different ads to see what works best.  I am not a fan of Facebook and other channels because even though your cost per click might be lower, and you can target really well, you end up not getting as many customers and not finding out what keywords work best.

If you are B2B business then then I would go to as many networking events as you can.  Tell everyone what you do and offer them Free trials.  At a later stage the most common mistake is to under charge but for now you are learning about your customers and gaining some credibility so get new customers any way you can.

Step 2. Analyze your Sales and Customers 

For Sales – Start simple – how many customers did you get from each channel.  Then you can add complexity by looking at costs for each channel and costs to acquire per channel.

For Customers decide if some customers better than others – do they buy more, do they send referrals, are they more profitable?  Then try to understand what makes these customers unique – use this to define your target customer.

Once you know your target customer you can refine your pitch to market to those customers.   If  you are a hair and makeup business and moms are your best customers the change your slogans to  hair and makeup for busy moms and show pictures of moms in your ads.

Think about which the best channels or keywords to invest your time and money and keep getting customers.  A marketing person and myself a few months ago would have said great – Keep pumping the funnel, find new funnels (email marketing / social media) ,expand to new markets and sit back and relax and enjoy your new customers……..But in my mind now I think there is a better way grow profitably and scale.

Step 3. Invest in Organic Growth

When I look at companies that are successful – cash flow positive, paying themselves a salary, and growing they usually get referrals, repeat customers, and organic customers.  If you are getting customers through Google and have figured out which key words get you most customers – build search engine optimization around that. Keep paying for PPC because you need to keep getting customers and I think it helps build SEO quicker, but devote some serious effort to organic SEO.

If you are B2B then expand your pitch and try to meet people and setup referral programs with partners that serve similar clients.  Speak and volunteer at different events where your target customers are and try to find ways for as many people as possible to know about you and your business.

Step 4 Create a Plan

Determine how much cash you will need to run business and how much you can invest in growth.  Then stop investing in growth in channels that are for bad customers or that are expensive to acquire and work on your organic growth.

Analyze your results against your plan each month and Understand WHY when you have a bad month and determine a plan of How to Fix issues. I see companies with millions in annual revenue that keep making the same mistakes every month.  No matter your size you need to keep analyzing results and making improvements.

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