Are you stressed out about how to grow your business?
I know how you feel.
There are a lot of smart marketers out there who will advocate lists of ‘top ten tactics to grow your business‘ and often those articles are very well written, and have a lot of good tactics in them…
…but then what happens?
You read the tactical blog post, and then another, and then another.
You have a ton of ideas on how to grow your business…
then weeks or even months go by with mediocre execution and poor results.
One thing that I learned from Ramit Sethi is that tactics are not enough. You have to be strategic about the way you focus on growing your business.
It’s the same as going after any goal (fitness, finding a great job, traveling, etc) — if you try to do too many different things at the same time, you end up going nowhere.
I call it “Moving 1 Inch in a Million Different Directions” This result (or lack of results) is a consequence of what my mentor Ramit calls ‘Marketing Tactical Hell‘
And it’s not just Ramit – The founders of a great startup called Groove, share that Chasing Tactics is The #1 Growth Killer.
(we’re not trying to be like this guy)
Still not convinced? Consider this fact from marketing expert Brian Balfour
“Most large companies get 80% of their growth from one channel anyways. Zynga —> Facebook, LinkedIn/Facebook —> Virality (via email), Instagram —> Virality (via sharing), Hubspot —> Content Marketing, TripAdvisor —> Search. Do I need to keep going?” from this article.
if tactics aren’t the answer… then what is?
Many of the entrepreneurs above who have stood the test of time agree – it’s having a strategy.
Putting Together A Growth Strategy
Take a minute to go through this exercise. It may seem simple, but front-loading the mental work of strategic planning can save you 10’s or 100’s of hours while you are trying to execute.
- Decide how much money you want to make.
- Define Your KPI’s (And write down your base-line)
- Decide how you will grow each of the top 3-4 metrics.
- Put blocks in your calendar dedicated ONLY to performing those tasks.
- Measure results. Double down on what’s working and more importantly, stop doing what isn’t.
Step One – Decide How Much Money You Want To Make
This is a counter intuitive strategy I learned in a webinar from my teacher Selena Soo.
She told a story about how a coach taught her that in order to build a 6-figure business that she would have to bring in around 8,300 / month! If you’re working with clients and working month by month, that’s a lot of clients!
So she learned that she had to redesign her entire business model in order to bring in that type of revenue.
So if you are doing any type of high value client work, or selling products, you need to reverse engineer your revenue goals to see if your $ / hour or $$ / client makes it possible to reach that goal.
One common mistake that I find when talking to people about their business model is that it’s not the driver… it’s the vehicle they built to get them there.
Here’s an example:
If you are charging $25 / hour – you have to work about 4,000 hours in a year to make $100,000… that’s 11 hours per day, 360 days per year!
Now if you 4-8x your hourly rate and convert to a high-value retainer or project basis, you can earn the same amount of money while working 1.4-2.7 hours / day on average.
That’s just an example from the consulting space that illustrates the huge difference in the quality of life that you can experience by moving up the value chain. The same general principle would apply if you were selling products online or offline. In order to reach your target monthly income, you need to design a reasonable business model that can get you there first.
If you are going at a fast pace, great!
BUT – if you are having trouble hitting your revenue goals, it might be time to dig in to the core of your business model and redesign it from the ground up.
Step Two – Defining Your KPI’s
Once you have a revenue goal, and an idea of how to get there, you have to focus on the areas of your business (or life) that will really move the needle. You have to define your most important Key Performance Indicators (KPI’s) and then work to grow each one.
Because of The Paradox of Choice – too much information actually makes the decision making process harder. It follows then, that focusing on fewer, more critical pieces of information will actually help you to make better and more focused decisions. It might sound zen, but there are a number of studies that suggest that information overload has negative consequences for productivity, happiness, and health.
I know from my own life that when I try to focus on too many different goals at the same time, I end up doing nothing.
Large companies use them for a reason. As famous management theorist Peter Drucker says… “What gets measured, gets managed.” You have to track the right key metrics to see if what you are doing is good or bad for the business.
It doesn’t have to be complicated.
Let’s take a look at the KPI’s for an online business selling info products.
Online Info Product Business:
Opt In Rate (O)
Conversion Rate (C)
Product Price (P)
(T) x (O) x (C) x (P) = Total Revenue
In A Coaching Business
Say you are a fitness coach. What really matters to you and your business? Let’s take a look:
Number of Clients (N)
Average Order Value (AoV)
Order Frequency (F)
N x A0V x F = Revenue
The ways to make more money is to get more clients, get them to buy more often, and/or to raise your rates.
(Aside: You can of course do cross-promotion, sell supplements, or something else, but that is a different business model at the core. The KPI’s for a supplement business would be similar, to the model above. It’s important when defining a growth strategy now to mix up different revenue streams.
You can have more than one source of income, but each different kind of business needs its own strategy to grow consistently.)
The same goes for a donation based non-profit:
Number of Donors (N)
Average Donation Value (ADV)
Donation Frequency (F)
N x ADV x F = Total Donations
The Power of understanding your business allows you to be systematic in boosting your revenue. Instead of just throwing tactic after tactic by doing random email, outreach, facebook post, tweets, and youtube videos, you can systematically increase each one. Strategically. One by one.
And the model above is multiplicative….
Say you were to increase JUST one of the above KPI’s of your business by 33%… what would happen?
Your revenue would increase 33%.
Now how about if you increased them all by 33%?
Let’s take a look:
1.33 x 1.33 x 1.33 x 100(%) = 235%
Notice the power of compounding in action!
Step Three – Decide how you will grow each of the top 3-4 metrics
If you have a successful business already, you have, by definition found some success…
But now it’s time to get systematic. Take each one of your KPI’s and brainstorm the top 1-3 things that you can do this week to move the needle on those numbers.
Then do those things relentlessly until you:
- Keep on winning
- Tap out that channel’s growth potential.
For reference, master copywriter Michael Masterson suggests in his book ‘Ready, Fire, Aim‘ that small businesses should focus 80% of their efforts on SELLING from $0-1M.
Step Four – Block Your Calendar To Grow Your KPI’s
Calendar blocking has been perhaps the best productivity tool that I have found since I learned how to set goals. Here’s why:
The human brain is not truly capable of ‘multitasking.’ In fact, we happy bipeds are much, much better at single tasking. The amount of work that you can do in 1 hour, interrupted is many times greater than you could do in 12, 5-minute blocks. There’s a great book on this phenomenon called ‘Flow.’
I won’t digress too far – but calendar blocking is also a great tool for making sure that work (or unproductive web browsing) doesn’t creep in to time blocked out for family, fun, or very specific tasks. Parkinson’s Law states that work will expand to fill the time allotted.
This is how I find time to do all of these things, even with an eventful day job.
Step Five – Measure Results and Iterate
If you find something that works, great! Do more of that.
If your growth is not where you want it to be, or worse, flatlining, then go back to your KPI’s and think of different ways that you can grow those strategic parts of your business.
If you are committed to growing your business try to implement this strategy to increase your revenue.
Remember, in building a high quality company, we can’t be like the stressed out, frazzled guy in the picture at the top of this post.
The person with a million papers or ‘to-do’s’ on our desk, constantly trying tactic after tactic to grow.
We have to be calm, collected, and strategic in our approach to building something great.
Just in case you forgot everything in the post, here are your next actions:
- Define Your KPI’s (and write down your base line).
- Brainstorm and Decide on 2-3 strategies for increasing each KPI.
- Block Your Calendar to actually accomplish these key goals.
- Evaluate in a month, and repeat / tweak as needed.
- (Bonus) Send me a note to let me know how it goes.
Now it’s your turn to take action!
Leave a comment with one thing that you will use to make your business better from this post.