"WHERE YOUR SUCCESS TAKES ROOT" Venturecare
Hello Entrepreneur, Getting a business off the ground requires a huge investment (both financially and in terms of time) from the business owner. But the work doesn’t end once the business is launched. Growing the business is a whole additional set of steps that can be intimidating and overwhelming. To simplify the process, we’ve identified the five things you absolutely must understand in order to grow your business.
This is long but worth reading the article if you want to learn about the key concept of growing up your business. Well, so what I have written in this article? I am going to touch the five key aspects of a business, which are required to understand and implement in order to grow any business. Here are the Five-
- DEFINING YOUR PRODUCT OR SERVICE
- UNDERSTANDING YOUR CUSTOMER
- EVALUATING THE MARKETPLACE
- MARKETING & SALES
- PAYING ATTENTION TO YOUR FINANCIALS
Getting a business off the ground requires a huge investment (both financially and in terms of time) from the business owner. But the work doesn’t end once the business is launched. Growing the business is a whole additional set of steps that can be intimidating and overwhelming. To simplify the process, we’ve identified the five things you absolutely must understand in order to grow your business.
DEFINE YOUR PRODUCT OR SERVICE:
Understanding your product or service from the inside out is unequivocally the most important thing you can do to grow your business. Now, this might seem like common sense (and hopefully you’ve spent a lot of time defining this in your business start-up phase), but there’s more to it than knowing what colors your product comes in or what services you will offer and what you want. There are two main reasons you want to ensure your offering is adequately defined:
In order to sell your offering (more information about selling later), you will have to be able to answer each and every question a customer might have about it. There shouldn’t be any unknowns for you. You should understand the product or service to the point that you can anticipate and answer any questions your customer might have. You should be an expert on your offering.
In order to grow your business and continue being successful for years to come, it’s important to think about the future of your product or service. Whether it’s something that will continue being valuable in the future, whether it’s something that might evolve with time and what that looks like. This will allow you to anticipate the potential future and be open and prepared for any change or evolution that your product or service might have to undergo.
Start out by asking yourself some questions about your product or service as it currently stands:
- What is it?
- What does it do?
- What solution/benefit does it provide my customer?
- Why is there a need for this product or service?
- What benefits do you offer that other companies with similar products or services don’t have? Then consider the future of your product or service:
- Will this product or services still be relevant 3 years from now? What about 5?
- If not, how will we evolve the product or service offering to stay current?
- Will there still be a demand in the marketplace for your product or service?
- Are there any potential technological advancements that might make it obsolete? How will you deal with that?
- If we have to evolve the product or service, how will our overall business change? Will it change the customer? The type of employee we might need? The type of operations facility we will have?
We’re not saying you need to be a psychic or visit a tarot card reader, but now that you’re an expert on your product or service you should have a good idea of what the future looks like. Being able to anticipate 5-10 years down the line will help you understand how you have to evolve to stay current.
UNDERSTAND YOUR CUSTOMER:
Now that you understand everything your product is, could be and will be, let’s take a look at your customer. Understanding your customer is almost as important as understanding everything about your product. These are the people who will keep you in business and help you grow. They will either buy into your product and story or they won’t. If they do, you succeed. If they don’t, you fail. So understanding who they are, what they’re looking for and how they make decisions is crucial to ensuring that you’re able to solve their problems and help them buy into your offering.
When evaluating your customer, you want to not only focus on your existing customers but also who your ideal customer is. Your current customer and your ideal customer should line up pretty well. In looking at these two people, if they are entirely different people, that’s an issue that you need to address. Perhaps your product doesn’t appeal to your ideal customer. Or maybe you’re being unrealistic about who your ideal customer is. Either way, make sure you address this inconsistency and make sure that your ideal customer is ultimately aligned with your product or service and where you’re planning on taking the company.
One approach for evaluating your customer is to think about them in terms of personal. Developing a persona is basically the process of giving this elusive customer an identity. The evaluation of a person will ultimately help you
Learn how to speak to your customer, how to seek them out and how to solve their problems. When developing a persona, you’re looking to evaluate demographics, behavior patterns, motivations and goals in order to create a realistic example customer.
Some questions you should ask in order to develop personas:
- What is their job title?
- What industry or industries do they work in?
- What do they want to accomplish?
- What are their goals in relation to your product or service?
- What are their biggest challenges in relation to your product or service?
- What potential concerns might they have in working with you?
KEEP IN MIND: You might end up with multiple personas, especially if your product or service offering is multi-faceted. That’s ok. In fact, it’s probably a good thing. It will help you determine where your product fits for your different personas and how to talk to them about your offering.
Developing a persona is only one of many ways to evaluate your customer. Whatever method you choose, your end goal is to understand these people and how they make decisions so that you can fit your product or service into their life. Ultimately, you want to develop a persona document like this to reference.
EVALUATE THE MARKET PLACE:
You’ve defined your offering, you understand your customer: the next important thing to look into is your industry and the marketplace. You need to understand where your company fits and how you can stand out in the industry in order to ultimately succeed.
A great way to launch your marketplace evaluation is with a competitive analysis. Sit down and think about who your main competitors are. Choose the companies who do the thing closest to what you do. Pick as many companies as you want but know that you’re going to have to do a lot of research so make sure the companies you’re selecting can actually be considered competitive to you. Your goal here is to analyze the product and service offering and determine how you can position your offering to compete with them.
Some questions you want to address:
- What range of products or services do they offer?
- Are they targeting similar personas?
- Are they profitable?
- Are they scaling up or down?
- How long have they been in business?
- What do their customers think about them?
- Pay attention to both the positive and the negative.
- Do they have a competitive advantage?
- What is their marketing strategy?
- What are their pricing structures?
- Do they operate in the same geographical area?
- What is the size of their company?
- What is their total sales volume?
- And, most importantly, what can I do to most effectively compete with them?
EVALUATE THE MARKETPLACE:
Your competitive analysis (especially that last question) and understanding your product and customer will all lead to your differentiation. How is your company, product and/or service different from these competitors? Why will your customers choose you instead of your competitors? Great differentiation will help your customer remember and understand you and help them ultimately decide to go with your product or service. For some inspiration, check out these great examples of brands who have differentiated themselves from the competition.
MARKETING & SALE:
The value of marketing is often overlooked, especially by new businesses because it’s a little hard to swallow the investment to put into your marketing not knowing what your return-on-investment will be.
The marketing world is huge. There are so many different approaches you can take to marketing your business, and determining what tactics, what media placements, what images and copy, etc. is incredibly important. Thinking that big right off the bat can be overwhelming. Before you can even think about the details, there is one major aspect of marketing that you need to decide on – your value proposition.
At its most simple, a value proposition is a promise of value to be delivered. Your value proposition should explain:
- How your products solve your customers’ problems and improve situations?
- What specific benefits a customer can expect?
- Why customers should buy from you over your competitors?
- But how do you create a strong value proposition? There are numerous resources to help you with this. Regardless of whether you seek out an external resource or develop your value proposition internally, you have to live with this for a while so make absolutely sure it addresses the items above to the best ability.
Being an expert on your business (and your product/service, customer, and marketplace) puts you one step closer to being the ultimate salesperson for your offering. But that doesn’t necessarily mean that you know the best way to sell your product/offering.
Before you can establish your sales process, however, it’s important to understand the sales cycle for your particular offering. How long is the sales cycle for your business? What lifecycle stages do your clients go through and how do they move through the funnel? It might help to start with a standard sales cycle graphic and work through it for your business.
Your goal is to determine what a customer in each level of the funnel is considering and how to move them to the next level of the funnel.
Moving them through your funnel is your sales process. A sales process is usually defined as the specific, concrete set of actions your team follows in closing a new customer.
A good starting point for developing your sales process is to look back at the last 5-10 deals you’ve closed and think about the following:
- What were the major steps in the process?
- What touch points did you have with the customer?
- How long did the process take?
- How much time elapsed between each step?
Using these questions, define the action that moves the customer from one stage to the next. Ideally, the reason a prospect moves from one step to the next should be based on the actions of the prospect, not the perception of the sales rep. You want to make sure that there was a concrete action that moved the lead to the next level they weren’t moved there just because the sales person felt like it was a good time.
Once you’ve defined the actions that move prospects from one stage to the next, look back at what touch points helped them make that move. Use those touch points to put together your sales process plans.
This is important not only for you to understand but also for any additional employees you might bring on. Having an established sales process will help everyone stay on the same page and ensure that you are operating in a similar manner.
PAY ATTENTION TO YOUR FINANCIALS:
Again, this might sound like common sense, but it’s astounding how many businesses do not have a strong grasp of their financials. Financial evaluations and business plans aren’t just for big businesses. It’s not enough to just ensure you have money in your bank account at the end of the month once all the bills are paid.
Yes, understanding your margins is incredibly important to running your business but perhaps more important than understanding your margins understands why they are what they are; where are you spending money and where are you making it. Furthermore, you should start charting your results as soon as possible so that you can accurately evaluate your month-over-month and year-over-year data. This is one of the best ways to evaluate business growth and determine where changes need to be made
We’re not saying that you need to understand everything right away either. So what types of things should you focus on first in regards to the finances? Start small and work your way up. Grow your financial knowledge like you would grow your business knowledge. Start with understanding what it costs to produce and sell and work your way up from there.
Some important initial questions to consider might be:
- What are your margins?
- How would an increase in a specific expense impact your margins?
For example, if you own a landscaping business where you’re visiting multiple people per day, how would a change in gas prices affect your bottom line? Think about what an INR 0.25/gallon increase looks like. What about an INR 1.00/gallon increase? Determine what changes you would have to make in order to offset that increased expense.
- What limits do you have to work with in order to generate a profit?
- Does your product or service carry a premium? What is it and how do you know what it’s worth?
- At what point would you need to bring on additional help to run your business? How would that impact your costs and profits?
We know what you’re thinking – isn’t this what my accountant is for? Well yes, and no. Your accountant is definitely there to help and may perform a variety of roles ranging from financial data collection, entry and report generation to providing advice and financial interpretation. Regardless of how involved your accountant is, it is still crucial for you as the business owner to fully understand your finances. Ultimately, you are the person who is going to be making the financial decisions so you want to make sure that you have the knowledge and understanding of what impact your decisions might have.
There are many online resources that can help you, as a small business owner, better understand your accounting including the Small Business Administration and the Internal Revenue System. In addition, your accountant is a great resource to help answer any questions you might have or help you better understand the types or reports you’re seeing and how to get a grasp on the information. But no matter where your knowledge is coming from, making sure that you understand the ins-and-outs of the money will help you make financially educated decisions to help grow the business.
Starting a business is no small task and building a business (big or small) isn’t much different, but with proper planning and execution, you can set yourself up to ensure effective and smart growth.
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