In 2021 the average inflation rate was 4.7% and this year monthly inflation rates ranged from 7.5% to 9.1%, figures we haven’t seen since 1981 US inflation calculator.com. Increasing revenues and profits is an eternal challenge for small business owners, especially in times of inflation.
In times like these, having a revenue growth strategy is critical. Here are six tips:
1. Have a roadmap
Many entrepreneurs see a business plan as a necessity to secure startup capital. While that’s true, a business plan should be a living document that provides a roadmap for success well past the first year. Entrepreneurs must return to their one-year, three-year and five-year goals in the plan and measure their forecasts against reality.
developing a business plan is critical for securing seed capital and in guiding the company once it is established. The plan explains what the company does, who runs it (and their previous experience), unique selling points, target market, and the competitive landscape. A good business plan includes:
- Executive Summary: A one or two page explanation about the company, its goals, activities, marketing efforts and revenue model.
- Company Description: What does the company do and how does it make a profit.
- Local Market and Competitive Landscape: A competitive analysis that describes how the company differentiates in the market.
- Product/service description: how the product or service works.
- Marketing and promotion plan: Outline how the company will promote its products and services. Describe the mix of website development, advertising, public relations (traditional and social media), trade show attendance, sampling and sales promotion you will be doing.
- Management: who runs the company and their experience level(s).
- Financial data: provide break-even analysis, cash flow projection, sample balance sheet and profit and loss statements.
- Investment: How much money are you putting into the business? (Tip: If you’re not willing to put in a lot of your own money, investors will also be wary of putting their money in it.) It’s important to estimate sales, income, and what kind of returns investors can expect.
- Appendices: Supporting documents (research, charts and diagrams, images, etc.
A well-written business plan can mean the difference between success and failure in securing capital and growing the business over the long term. The business plan provides a roadmap that explains how to get the business from point A to point B.
2. Focus on Organic Growth
While the thrill of the hunt for new customers can be exciting and rewarding, don’t overlook it existing customers as a lucrative source of new revenue. After all, you already have a relationship with them. Offer new products, innovations and excellent service that can help them succeed while expanding their budget with your business. Consider setting up a loyalty program that offers discounts and/or other financial incentives to spend money on your business.
Competing for new customers can consume a lot of valuable time with no guarantee of reward. Expanding existing business is a solid method of revenue growth with a reduced risk of wasted effort. It’s much easier to keep an existing customer than to go out and win a new one.
3. Invest in your sales execution plan, then hire the right talent
“To execute on a revenue growth plan, a company must focus on building the right sales process, technical stack/sales playbook, and then hire the right talent. This allows your sales team to meet and exceed numbers,” advises Brian O’Neil, CEO and founder of Sales Empowerment Group (SEG), which has helped more than 500 companies accelerate revenue growth. “If you look at the most successful sports teams, they build the script and the strategy and they go after the right talent.”
With the right sales team, your business is better equipped for further growth. Once a company starts to establish itself, the founder may end up spending a lot of time overseeing operations and production. It is important to always keep selling and at some point someone other than the CEO has to be involved in the sales function.
4. Raise enough capital for growth
Invest and reinvest in your business to ensure growth. If you’re starting a business, borrow enough money to weather unavoidable delays and unexpected surprises that could affect your opening. Have enough money to cover adequate inventory, employee salaries, rent and utilities, and marketing and advertising costs. You don’t want to go back to a lender for a second small business loan because you didn’t budget properly.
Know which facts of your business need more financial support. For example, demand for your products and services may be high now that pandemic restrictions have eased. pent up question, supply chain issuesfuel prices and labor shortages drive up the cost of doing business. Make sure you have enough capital to cover these costs. Determine how much more money you need to hire additional workers, pay for raw materials and continue your marketing efforts, then go out and get financing.
Sometimes unexpected opportunities arise and action needs to be taken quickly to enable your business to grow its revenue. For example, if you sell products online and have the chance to buy inventory from a company that goes bankrupt, the chance may be short. If a warehouse or other business space in a good location suddenly becomes available, growth capital available renting or buying the property is critical. The opportunity cost of doing nothing could be much greater than the cost of capital.
5. Increase Marketing Efforts
Make sure to create profiles on the major social media platforms. Being active on Facebook, Instagram, TikTokand Twitter allows you to market your business relatively cheaply and communicate with a much larger number of potential customers. Online marketing is so much cheaper, but not as cost effective as traditional print ads and mailings. Businesses that are on social media are easy to find and fans are eager to share your business with their friends. This is especially true for companies that target young people.
After the pandemic, trade fairs and other networking events will take place again. They provide excellent opportunities to establish connections and build relationships with potential customers.
6. Be flexible
While the COVID-19 pandemic has had devastating effects on some small businesses, others have prospered by innovating. In the restaurant sector, many eateries invested in starting or expanding their food delivery services when people were unable to dine indoors during pandemic restrictions. In places like New York, local governments allowed restaurants to dining outside on the street. Some establishments have flourished thanks to this innovation, and now the city has extended its approval of country retreats designed for pandemic dinners.
Companies that had the ability to deviate from traditional practices were often rewarded financially. Thus, many high-end eateries, which suffered greatly from indoor dining restrictions, started their presence on . to increase golden belly, an online marketplace for gourmet food lovers. Have a craving for authentic New Orleans seafood gumbo? You can order it from the legendary Commanders Palace.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.