Entrepreneurs diving headfirst into a new business venture have more in common with LEGO enthusiasts than they would like to admit.
Your enterprise has reached a peak.
You’ve constructed the 3000 piece Death Star set… but, and here’s the caveat, you’ve only reached a peak, not THE peak.
Which leaves you with a few options.
You can stay your hand, hamper your imagination, and cage your ambitions. Basically, be as simple as humanly possible and simply “stay within the lines”. Or, and this is the pivotal moment that separates the mortals from the Steve Jobs, you can stare at your business and coworkers and say:
“This is a good start. Now let’s make this baby grow. Fellas’ burn the manual and let’s think outside the box.”
Of course, this sounds great…like something from a movie. But how do you make it a reality?
Explore Your Market
The best way to make your investment pay fruit is by exploring, beating and penetrating your own market. You already know your niche and target audience, now it’s time to really dig in.
You first instinct, “more business = more customers”, is the sort of gut feeling that sounds right, but isn’t actually true.
It’s more cost effective to convince people who already know your goods to break out their wallets and buy more of your wares. Getting new customers is much harder than working with existing ones.
Consider the words of Fred Reichheld from Bain & Company:
Consider the cost of serving a long-standing customer versus the cost of courting one. Across a wide range of businesses, customers generate increasing profits each year they stay with a company. In financial services, for example, a 5% increase in customer retention produces more than a 25% increase in profit. Why? Return customers tend to buy more from a company over time. As they do, your operating costs to serve them decline. What’s more, return customers refer others to your company. And they’ll often pay a premium to continue to do business with you rather than switch to a competitor with whom theyíre neither familiar nor comfortable.
Explore New Ideas
Just like it’s easier to work with existing customers, a simple way to increase profits is to attract more people to your product.
Discover, promote and invent new uses for your products or services. Walk down any Walmart aisle and chances are that each and every product on that endless army of shelves has been sold to the public under a strange umbrella of practical, odd, zany and even miraculous properties. Properties that go way beyond their main purpose.
For example, consider all the people pitching the idea that all you need to survive the apocalypse is: WD-40, Olive Oil, Crazy Glue, Duct-Tape and Milk. None of these things was originally intended for disaster situations.
There’s a whole subsection on YouTube alone dedicated to this theme. Investigate your product, and discover in it things you never dreamed off. Nothing is too bizarre or too wacky; leave nothing off the table.
Here’s a great example: each time an authority figure says that “something something” has a previously unknown holistic quality, that something’s profit suddenly skyrocket.
Make Them Addicted
Brand loyalty: you have to snare your public and make them unconditional devotees. Inspire in them religious fervor. There’s a reason you’ll never catch a Coca-Cola fan sipping a Pepsi. Why in certain states Bud reigns over Miller. Why some folks will only wear Nike for a marathon and never anything by Under Armour. There’s a reason why, every September, with the coming of the new iPhone, Apple stores have to bulk up their security.
It’s not a question of quality or quantity necessarily, it’s all about subjective perceptions.
You have to create, using both classic and non-traditional marketing techniques, a clear link between your product and your public’s self-image. The key to Brand Loyalty lies in making your wares essential facets of your client’s life. Intrinsically tie together your goods and the positive perception or construct they’ve made of themselves. Or, make them so reliant on you that it costs more for them to switch to someone else.
For example, consider Rolex. They have defined themselves as being the luxury watch. If you want to be seen as wealthy, you wear a Rolex. Or think of Nike and how they dominate the basketball world. Or Zappos and how they signify customer service.
Consider how you can inspire deep product loyalty in your customers. There are all sorts of simple ways, including:
- Have amazing customer service
- Offer a product associated with a specific lifestyle (think Whole Foods)
- Constantly use imagery that associates with a self-perception (think Fitbit)
- Give rewards to loyal customers
- And many more
If you manage to make zealots out of your audience, they’ll come back – time and time again – to your trough.
Extend Your Reach
One of the best ways to attract new customers is to explore uncharted territories. Boldly go where your products have never gone before. Think about the various ways you could do this.
- Open a new location
- Advertise to audiences you’ve never previously targeted
- Create products that will target new audiences
- Partner with companies offering similar, supplementary products
Digital advertising on platforms like Facebook and Google allow you to reach audiences you never thought possible.
These days, people in give more credence to what’s happening inside their phone’s screen to the discussion they are having over dinner. The lines between reality and Virtual Reality have blurred. You can take advantage of these blurred lines.
In most cases, spending some advertising money on a social media platform you didn’t even know existed, or a service that specifically targets an unknown buyer’s pool, might be more cost-effective than getting a loan for a new store location.
Go Big On Word Of Mouth
Ebay, Amazon, Tripadvisor, UBER, AirBnB, and hundreds upon hundreds of platforms peddle their services and products with the explicit help of their customers. The truth of the matter is that referrals, good costumer reviews, and positive experiences are the driving force for sales these.
Each star on Amazon, owl on TripAdvisor, or thumb up on Facebook, for any business venture, is like to getting a pat on the back by God. There’s a reason why certain enterprises go the distance, and are willing to sell off their mother, for a 100% review anywhere.
Scour the web and, I know it’s a pain, but list each and every platform out there (Google Maps, Snapchat, Yelp, Facebook, Twitter, etc), then get some positive feedback. It’s a simple, time demanding practice, that will payoff in a big way.
If someone leaves an unfavorable review, follow up on immediately and make it right. Show customers that you are a trustworthy company.
Go Across The Waters
Take a walk around your house, pick up random objects, and turn them around. That ladle, that alarm clock, that guitar set, that BluRay of Deadpool, that kitchen towel – what do most have in common? That’s right! 3 out of 4 have a big label that reads: “MADE IN CHINA”, and there’s a 50% chance the last one says: “MADE IN TAIWAN.”
If you want to make your business grow, then you have to look beyond state lines. Cast your eyes over the horizon and start thinking Internationally. Sometimes, it might seem strange, but the same qualities and characteristics that manage to keep your product safely hidden behind the eight ball in your neck of the woods, might be considered amazing overseas.
Here’s a clear example: ever wonder why Hollywood keeps dredging out so many innate sequels? Ever wonder why, despite the fact that the first one was a gigantic bomb in the box office, they suddenly decide to churn out a second helping? Because, overseas – in some exotic locale – that movie broke records. Let’s look at some numbers:
WARCRAFT the movie:
Domestic Sales: $47,225,655.
International Sales: $385,900,000.
It’s a plunge into unknown waters, and outlining and mastering an exportation plan is no easy task, but it’s one that pays off in gold.
And here’s the good news. Given that you don’t need a physical storefront to sell products to people in other countries, you can implement this without a huge amount of work.
Consider testing ads for your products in other countries. See which countries send the most traffic to your website and then target those countries with ads. Find out what products are popular in certain countries and see if you can tap into that popularity.
Be Cost Effective
An IPhone, depending on the generation and model, costs about 350 to 435 dollars to make (that includes parts, assembly, transportation, marketing, rent, employees, etc.). Those same models are sold for 700 to 900 dollars. That’s a HUGE profit margin! Almost a 100%.
All great companies will swear by one fact: the secret to success is to bring the cost of manufacturing down, and maintain a semblance of quality. If you find this golden ratio, than you better start building a Scrooge McDuck bank for your gold coins.
What we are talking about is growing your business’s bottom line. Everything, no matter how small, takes a bite from your profits. Taxes – snap went those jaws. A/C at your office – crunch. Faulty overhead lamps – yummy went the profit devouring monster. Hour commute to work – a buffet.
Here’s a nice nice example. SG guitars used to manufacture their line of electric guitars in Taiwan. One day, a competing company approaches them with an offer:
“I can produce the low E string for 5 cents less than what they are charging you.”
The head haunches rushed madly into that handshake and moved – despite the overall initial cost of millions – to the new factory. In less than a year, their profits had skyrocket. Why? Because those five cents, spread out over so many guitars and products, equaled mountains of cash.
One small move, that might cost an arm and a leg at the beginning, might fundamentally change the dynamics of your revenues.
Scrutinize all your costs. Are there ways you can cut down on overhead? Can you cut production costs without sacrificing quality? Can you save on shipping? Each of these things represents potential growth for your small business.
Being the owner of a small business isn’t easy. You work long hours. You have to handle a lot of things that would normally fall to other people in a larger company. You have to be creative to beat out competitors.
But you get to be your own boss, the captain of your ship. You drive the train and you can take it into new, unexplored places.
While expansion might be scary, it can be done. Be creative. Maybe take a few small risks. You’ll be amazed at the payout.
And when you need that extra capital to accelerate growth and go far an SBA loan, we’ll be right here to help with the SBA’s life insurance requirement.