October 8, 2013
10 Tips for Growing Your Business at 100% each Year
Growing a business is never an easy task, let alone in the depths of a recession. It’s all about knowing how to use your energies wisely, and how to concentrate on the things that matter most.
Before I get too far into this post, I should make a confession first: Reload Digital actually only grew at 88% last year. Not quite the magical 100%+ we were aiming for. But as any business leader will know – 88% is better than most, and it’s something to not only be proud of, but to look back at, assess and learn from, so that next year will be 88%+ again.
So, looking back, here’s what I think has put us in a position to succeed over this past year. And here are the things I’ll be concentrating on in the coming 12 months:
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1. Have a great product – It’s critical that what you offer is needed by the market – and that it’s differentiated from the rest of your competitors. Digital marketing is a competitive space that’s becoming increasingly commoditised. (A common problem across many sectors.) In order to stand out, you need to offer something more, or better than the rest of your competitors. We’ve created our edge through the development of a more consultative and tailored approach, a broadening of the services we offer, a focus on bottom line returns and customer engagement (rather than red herrings like rankings, clicks or Likes) and top notch customer service. These are things that now set us apart from other agencies simply offering standardised packages and low quality churn.
2. Build a great team – Any business is only as good as its people. So it’s crucial that you bring together staff that are going to provide different but complementary outputs. Who these people are and what skills they bring will no doubt change as your business grows. If in month two you’d asked me what role our 4th member of staff would fill, I can guarantee you it wouldn’t match the reality of the job ad we put out. Likewise, if you ask me now who person #12 will be (aside from now realising that I won’t make that decision until the weeks before we hire) I’m sure I’d get it wrong. The reality is that things change, and you need to be flexible enough to adapt. Just make sure you’re always bringing on board people who are going to offer something extra, and building a team that will help you move forward as a business. Make sure too that whoever you bring on is enthusiastic and has a great attitude towards what they do – hands down, this is more valuable than someone with the skills but none of the passion or drive.
3. Focus on top line revenue first – Yes, profits are important. But if there’s one thing I’ve learnt from growing a business, it’s that the early months and years are all about turnover. And growing it as aggressively as possible. It’s this income that will give you the ability to stabilise and grow.
4. Cash flow is king – Following on from point 3, don’t forget that cash flow is everything. It’s all well and good to win business, and to have a healthy-looking invoice list, but that doesn’t mean anything until the client actually pays. Make sure you have processes in place to chase receivables down – and/or to ensure you have at least a deposit in place before you start doing any work. It’s rare, but there are unscrupulous businesses out there, who will happily take your work and refuse to cough up for it. Think about the safeguards you might need to put in place to ensure you get your money before they get their goods. At Reload, we have a ‘No pay, no display’ policy, whereby client reports or campaign plans will only be sent once overdue invoicing has been settled. Of course, this is a measure to use with a degree of caution and judgement. You should not rock the boat with your best clients who have a history of paying on time. But you should apply caution to those that are new or give you cause for concern – because time spent on a client that doesn’t pay is time that could have gone into building your bottom line elsewhere.
5. Reinvest your profits – Once you are making profits, plough them back into your business. Of course, it’s important to be careful, cautious and strategic about when and where you decide to spend your hard-earned profits. But a small business making 100% profit margins will almost certainly grow more slowly (if at all) compared to the business that takes a 20% profit margin, and ploughs the other 80% back into a new member of staff, a new piece of equipment or a new marketing campaign. The businesses that achieve rapid growth take on the risk of that investment – indeed, Reload’s attitude in its early growth phase was to ‘hire before you need to hire’ – because the rate of growth and optimism was such that by the time that hire was completed, the next hire was already being considered.
6. Work with great people – And I don’t mean your staff here. Very few businesses can fully sustain themselves – so whether it’s suppliers, distributors or partners, make sure you work with the best. At Reload, we concentrate on what we’re good at – which is digital marketing. But we work with a range of partners who we can turn to for everything else, from high quality web design, to top notch video production, savvy PR and more. By making sure we partner with the best, we can achieve wider client objectives, confident that our partner agencies will deliver on the things they’re good at, letting us get on with the elements that we’re great at.
7. Focus on leveraging your key successes – It sounds like an obvious thing to say, but concentrate on what you’re really good at and what is bringing in the most revenue. It’s that old 80/20 business rule – 80% of your revenue will come from 20% of your projects / customers / service offerings, etc. Once you’ve found your niche, make hay while the sun shines. Because you never know when the market is going to change, or a new technology is going to arrive that will shake up your business model.
8. Keep an eye on growing trends – Following directly on from point 7 – it is, of course, critical that while you’re making your hay, you don’t take your eye off the ball and miss the next big thing. Blockbuster, Kodak, HMV – all one-time powerhouses that missed (or arrogantly dismissed) the emergence of new trends and consequently got left behind as the world moved on. It’s easily done in business – sticking to what you know is easy, and it’s tempting to simply dismiss new ideas as a ‘fad’. But companies that embrace new technology and spot new value in their sectors are the ones which thrive. As a digital marketing agency – newness is the lifeblood of our business. Vine, Pinterest, Google+, Twitter advertising – all platforms that can count their age in months rather than years or decades, but already a critical part of what we’re using to deliver client campaigns. ‘Surfing the curve’ and staying ahead of the ballgame is part and parcel of what we do. The agencies that have stuck to old school tactics that no longer work are gradually being found out and falling by the wayside.
9. Make succession plans – Somewhat in line with point 8, always be thinking about your next move. Particularly when it comes to staffing. No one person can carry a whole business. Develop a team that has specialists as well as generalists, and make sure that ‘junior’ staff are set on the path to becoming ‘senior’, so that they can start leading teams, building sections of the business and creating bottom line value. It’s not always easy to hand projects over, but make sure you and your senior managers do it – otherwise you’ll never give your juniors a chance to develop their own experience and grow into a more senior role. You can still watch and guide from a distance – while at the same time freeing yourself up and allowing others to ‘learn by doing’.
10. Make decisions quickly – There are a whole raft of business mantras that have developed from this notion – and as with all these things, they’ve become a cliché for a reason. Whether it’s about spotting your opportunity and moving on it fast, or trying something that doesn’t work and learning from it, you’re almost always better to do it quickly. Chances are, you’ll plump for the same decision a week from now that you would an hour from now. Don’t agonise over it. Give yourself 24 hours to see if your opinions change, and if they don’t, go for it; whatever ‘it’ is!
11. Build a happy working environment – Bonus tip here. And not one that you need to be a rocket scientist to understand. If you create an engaging, inspiring and happy workplace, you will reap the rewards. Happy staff will stay with your company longer and work harder for you – because it doesn’t feel like work. And if you give them opportunities to expand their knowledge and experience, while having fun along the way, they’ll have less of a reason to look elsewhere.