Ready to Grow Sales & Revenue? Your Next Step…
Effective Ways to Grow Sales and Expand Your Business
Keep it simple - it’s that easy. Business owners have a barrage of information that require constant attention and at times, distractions seem unavoidable. Local Union believes an increase in revenue is simply an increase in strategy. Pause and reflect on the possible paths forward and focus less on chasing that shiny object (squirrel!).
Before jumping headfirst into this article, we should note not every business is in a position to grow sales. However, if you are ready to ramp up the revenue, let’s do it!
Defining How to Grow Revenue / Sales
In the simplest terms possible, there are only two ways to grow your business.
Increase rate (how much you charge or how big your margin is)
Increase volume (how many products / services you sell)
Rate means that you are going to price more for your services (or focus more on higher margin products / services), so your overall revenue will grow through pricing actions.
Volume is the increase in orders or number of goods being sold. Volume can encompass a wide variety of tactics uses to increase quantities such as opening a second location, adding new products, or opening a new channel to drive more sales.
When is it Time to Price Higher?
People tend to fear price increases because their first instinct is that they will lose customers. If this is your first thought, then the next question you need to ask is:
“Is my business too busy to take on additional work or am I selling out of products right now?”
If the answer to the second question is yes - that indicates to us that there is more demand than supply for your products or services. Pricing higher may come as an internal struggle, but if customers aren’t balking at the current price tag, then a modest price increase should be considered because you’re underpricing yourself. Alternatively, the higher price point on your services or products will naturally weed out leads that aren’t as serious or who will bicker on price and consume more attention than average.
Instead of rising rates for all of your products, you could also raise rates for products with low margins or certain categories of products / services that you hope to grow.
Simple Ways to Increase Volume
Increasing volume can be organic, through product diversification, or through investment. The key theme across each of these areas is that the number of transactions increases. So let’s take an in-depth look at each one.
Growing Organically - Some clients offer such a unique, one-of-a-kind product that growth occurs simply by word of mouth. In these businesses, they are able to increase volume simply by offering a product or service and being in business longer. To expedite this process, adopting a marketing strategy can help customers find your offers quicker. Refining your messaging and targeting the right customers can be key to achieving organic growth.
Product Diversification - Another way to increase volume is to offer new services or products. These new offerings are a means to attracting new clients or increasing sales with your existing clients.
There is a danger in offering new products though; if done incorrectly it can be confusing to clients. From personal experience, Local Union offered too many services in our early days because we felt we could offer a wide variety of solutions. For us the solution was refining that messaging and making it easier for customers to understand. Ultimately, we ended up growing our services into 1 of 3 categories, 1) Business Plans, 2) Custom Solutions and 3) Coaching and Development. An example of product diversification for Local Union today could be business partner…who knows what the future holds.
Reach - No matter if your business has a physical shop and sells products or is a home-based business, there are always ways to extend your reach to grow sales. For a physical shop that may be selling products online, through Etsy or even using Uber Eats to grow sales. Alternatively, you could expand the geographic zone you’re serving and expand into neighboring communities. This could be through increasing staffing to serve a wider customer base or targeting new zip codes. As a real-life example, Local Union started offering business plans on Fiverr and we have customer requests from all over the US. Check to see if there are online marketplaces that could work for you.
Investment - Sometimes the best way to grow sales is by investing in your business. An example of investment is opening a second location, moving into a bigger space, hiring staff, or even acquiring a competitor. All of these outcomes should result in expanded sales, but you should note that you’re essentially paying to buy more sales. In many instances it makes sense to further invest in your operations, but confirm the return on investment (make sure the investment pays off in future revenue streams). One of the leading reasons a business fails is because they try to grow too fast. Investment should be fully thought-out and planned out months and years in advance.
So What Makes Sense for Your Business?
Think through what stage you’re currently at and ask yourself if you’re in a position to grow. Does it make sense to focus on pricing higher or is it your dream to expand the number of sales in a given month or year. No matter the industry, business rules apply to your industry. Be intentional in growing your sales and ensure you’re driving the leads you want.