How to Grow Your Business Without Sacrificing Your Personal Life
How to Grow Your Business
Small business owners are known for wearing many hats to make their operations successful. Revenue and hiring are top concerns for small business owners who want to grow but feel trapped by what they’ve created. We see it all the time. The owner is the hub of the entire business: they interact with customers, ship products, do marketing, sales, and provide customer service. It’s the job that never ends. This centralized model of business might work at first, but over time, revenue quickly plateaus and the business suffers.
No one can do it all, but we understand the stress of trying. It's common for business owners to want growth without knowing how to get there. Especially when it feels like everything will fall apart without them. It’s scary to try something new, especially when there are so many directions to grow your business in. Which one is the right one? New markets always present themselves, competitors enter the space, and the pressure expands to chase down opportunity everywhere. It’s also hard to picture the kind of future you dreamed about for your business on the day you opened. That feels so far away and disconnected from now that you wonder if it's even possible to get back to the reason you started.
Ways to Avoid a Survival Mentality and Grow a Business
It’s a common problem for small business owners to survive the daily operations of their company instead of creating the future they want. Distractions provide plenty of new problems to work on, customers to serve, broken things to fix, and people to please. The big difference between owners who grow in revenue and sell more products is an understanding that the sacrificial work they invest to start the business (while important) won’t get them across the finish line.
Burnout is a more likely consequence of running a small business than seeing it across the finish line. According to the Bureau of Labor Statistics, 20 percent of small businesses fail in their first year. By year two, it's as high as 30 percent. By the end of ten years, up to 70 percent of original businesses will have closed up shop. So from a decade’s perspective, only 30 percent of small businesses make it. Covid-19 made it an especially harsh year for small business owners, but this data on success rates actually excludes the effects of Covid, making it a solid picture of where the average business lands.
Survival mode is a short-term solution to your business’s problems. While lockdown restrictions pressured you to punch the clock at crazy hours (and do the work of five other people), getting caught in the tyranny of the urgent won’t help your business grow. Being your team’s only problem-solver is a bandaid, not a solution. You need strategy and support to carry you through the next decade in your business and beyond.
Owners are the subject-matter experts at their companies, which is part of what’s keeping them stuck. Reducing reliance on you as the axle on which the wheel of your business turns is crucial to growing your business. If you find yourself perpetually wishing for more hours in the day to get things done, working longer hours, but slipping further away from your long-term goals, you are stuck in the owner’s trap. You need to grow your team, reduce your team’s dependence on you as the central decision-maker, and drive up your business’s value by creating recurring revenue.
From Humble Beginnings to a High Growth Curve
The easiest way to make your business grow is by doing an evaluation of your core offerings. It is important to find the sweet spot between which of your services or products are the most teachable, repeatable, and valuable. For example, you might have a high-paying business client who reappears once a year. They pay a lot more than most other clients, but this client consumes a lot of time, orders infrequently, and requires more to process their order. While this client might be more valuable than others, they aren’t necessarily repeatable. From a business perspective—they are an outlier.
However, you might have any number of clients who pay an average amount for your services. They re-order your services more often and provide a higher margin of repeat business. In this example, the lower-paying customer is actually more valuable than the high-paying client. Why? Repeat business.
Lastly, teachability is an important aspect to evaluate your service offerings. Ask yourself: Which of my products or services can I train others to do that don’t require a high degree of technical knowledge or experience to pull off? These services which are not dependent on you, aligned to your most valuable customers, and the most reliable for recurring income, are growth opportunities to target. Business owners often get stuck in expansion mode by trying to meet the demands of any customer who buys their offering. This is a mistake. The first principle of high-growth businesses is to sell less stuff to more people, which is the direct opposite of what most business owners do.
How to Make the Right Customers Happy and Attract a Buyer: A Case Study
In the world of direct-to-customer sales, one company called Dollar Shave Club sought to undercut competitors’ high prices on razors (Gillette had 70 percent of the market share at the time) by using excess inventory from factories to sell to customers at a cheaper price than brick and mortar locations.
In the realm of subscription-based single-use consumer goods companies, they were a model for recurring revenue and repeat business. Using a simple strategy (cheaper razors and less hassle) they focused on a single product and launched a successful business. Direct-to-consumer brands seem to have only strengthened during the pandemic, as values like ease of ordering and convenience merged with an intensifying consumer concern for safety. Not having to go out in public to obtain consumer goods proved to be a major win for any direct-to-customer business in 2020.
The company was also unusually good at fostering customer loyalty. The entire brand incentivized first-time customers to “join the club”. This posed an opportunity to cross-sell products in the men’s grooming and personal care market, which the company did. The idea was wildly successful with customers. The company enjoyed a rate of 69 percent first-time customers making a repeat purchase within their first month, and one-third remaining as loyal subscribers even 2 years later. This attracted the attention of one of the biggest competitors in the space: Unilever.
In all, the company is a textbook example of starting small and building a loyal customer base. Dollar Shave Club was acquired by Unilever in 2016 for a jaw-dropping $1 billion. This is five times the projected value of the company in 2016. Leading in customer loyalty is linked to real financial outcomes, as DSC owner Michael Dubin, would affirm. Repeat business modeled on sustainability has the potential to skyrocket a small business into the future.
And nobody knows this better than Fred Reichheld. Reichheld, a business strategist who discovered the power of the Net Promoter Score (how likely a customer is to refer your business to a friend), uncovered a link between businesses that have a high loyalty and referral ranking with their customers, and enjoy growth.
Reichheld found something interesting. He tracked, over a 20-year period, several Fortune 500 companies and found that those that performed with a Net Promoter Score of 50 percent or more grew faster and more sustainably than the average business. This is important because acquirers are looking to Net Promoter scores as a means of measuring which businesses promise the most future capital. Net Promoter Score is a measure of how likely it is that your customer base is positioned to buy from you again and keep buying, which is a healthy sign of recurring revenue.
Make Your Business Grow While Maintaining Work/Life Balance
All of this talk about growth might have you concerned. How are you ever going to be able to pull off the amount of work it takes to be a high-growth business? In this pursuit, we are in your corner. Reducing activities that require you to work “in” your business and increasing the number of hours you’re working “on” your business as an owner requires accountability.
Remember the owner’s trap from earlier? The art of delegation and placing the right people in the right seats is half your battle. Once you’ve identified which market opportunities and products are teachable, valuable, and repeatable, you can invest more into your hiring practices and expand your team. Start with a role description for team members you need to hire first to invest in the most valuable area of your business. With recurring revenue in mind, which teams provide the greatest asset to ensuring your most valuable customers get what they need? What is holding you back from thriving as a company? It’s time to move on these fronts.
A good leader, especially a good small business owner, recognizes that the number of hours left in a day isn’t the problem. The problem is getting the right people in the right seats to expand and multiply your organization’s ability to perform. It isn’t about “getting it all done”. No one is capable of doing it alone. Expanding your reach to include valuable contributors to your business leads to overall success. Is hiring someone for marketing crucial to reaching the kind of customers you want to repeat? Get someone on your team. Do you need to look at the data of which customer segments are loyal and learn how to capture and hold their attention? Get someone new on board.
Make these crucial shifts between where you are and where you want to be by getting out of the center of the problem. Too many leaders mistake their inability to perform like superheroes as the reason their business has failed. That is rarely the problem. What we see, more often than not, is a lack of ability to let go of key areas of the business and teach them to someone else. This requires the art of delegation and the ability to step back from the business and be content with working on where it’s headed instead of helping it to survive to the next day.
Grow a Company the Right Way with a Small Business Advisor!
As you reduce reliance on any one team member to get things done for your business, you will begin to experience the lift of collaboration. Less business calls infringing on your time with family. Less pressure to bring your laptop on vacation because you know that work will drag you back into its vortex. Less anxiety about all the things you aren’t getting done. Reaching out and seeking accountability with the help of a business development advisor will make all the difference for your business. It will keep you on track toward immediate and future goals: even help you to find an acquirer that will ignite your growth and expand your offerings.
Helping a business grow isn’t a quick fix or one-time solution. There are several areas to make your business successful, from customer loyalty to employee satisfaction all the way down to the products you are investing time and money in. If you are ready to learn the value of your company and receive one-on-one attention to address the growth barriers that are plaguing your small business, it's time to get help. Start treating your products, staff, and company's future with the attention each deserves. Talk with a business growth consultant who will take time to understand the problems your industry faces, the barriers created by regulation, and ever-shifting consumer attitudes, and get growing in the right direction.
