The Nine Drivers of Growth
The Nine Drivers of Growth
Drivers
We first begin with the idea of leverage, a way to use something strong but small to spur growth that continues to build and achieve exponential growth. Let’s look at some drivers that help businesses grow and expand it to bigger ends.
1. Driver: Marketing
Costs and efforts in marketing are often fixed but yield an undetermined number of sales leads, which leads to an unknown closing rate. Any marketing input is likely far lower than the potential of the output.
Let’s look at a few examples of marketing output.
How can you effectively market?
Look at your company and take note of the different ways you are marketing to clients. Which ones are the best performing in terms of sales lead acquisition & conversion rate?
1) What employees are the best performers? Look at how they are closing sales and replicate what they are doing into a company process that the other less productive salespeople are doing. This might not be everything one employee does, but an amalgamation of every good action within your sales force. Creating both marketing and sales policies around proven successful practices is the best business practice.
2) What are other companies inside and outside your industry doing? Of these marketing outputs, are there any not being done by your organization? This includes lead generation, conversion, re-selling & up-selling, and it is okay to emulate what others are doing.
3) Create a process within your company for checking what others are doing outside of your company in terms of operations, sales process, and marketing. This process also needs to include how you will go about implementing new ideas in the least disrupting way. The business owner should always be on the look for better ways of doing things within their company but also make it as frictionless as possible for employees to submit their ideas even if you do not use them.
2. Driver: Strategies Over Tactics
Strategy
A strategy is a plan or method put in place to achieve a goal or result.
Tactics
An action or strategy carefully planned to achieve a specific end.
Strategy Over Tactics
Let’s begin with what we mean by the two terms. While both are important to have in your company, a strategy is far more effective to spur growth than tactics are. A tactic is something you do to achieve a short-term target, like hitting enough revenue to meet operating costs. A lot of business owners stop there and do not think about a larger strategy that their business will follow.
A true business strategy takes all inputs, outputs, processes, and policies and shapes them to achieve your company’s core purpose—a clear strategic plan.
Do not focus on what gets a company through the week or month. This time frame is too small and forces the owner to be tactical instead of strategic. Look further into the future and plan a one year, five-year, and ten-year plan. Yes, easier said than done, so let’s look at ways you can be more strategic with your business.
(1)What are you doing now
Look at the business and take stock of the current tactics and strategies being used. Again, tactics are the mechanisms, approaches, methods, steps, the outputs you used to accomplish or deploy that big picture strategy.
Clues that your marketing is tactical and lacks an all-encompassing strategy. Are you advertising products but have a weak brand? Are you advertising on Google but have few reviews? Are you requesting referrals but do not have a written policy? Are you branded but fail to tell how, why and what makes you attractive as a business? Do you see your customers as profit and not clients you are protecting?
Tactics are good, but making sure each tactic used adds to a larger strategy is the way to go. This way leads to massive growth.
(2) What are you doing now
1) Understand the difference between strategy and tactics. Look up different definitions on Google, Websters and Dictionary.com.
2) Look up the definition of tactic and strategy in a military context, see below:
Tactic: an action or strategy carefully planned to achieve a specific end
The art of disposing armed forces in order of battle and of organizing operations, especially during contact with an enemy.
Strategy: A prudent idea or set of ideas for employing the instruments of power in a synchronized and integrated fashion to achieve multinational objectives.
(3) Preformance
Identify the highest preforming businesses in your industry. See if the owner will talk to you about their operations.
(4) Implement
Once you observe a better policy, find a way to adapt it into the business
Analyze your Current Strategy
- What is the purpose of your company? This helps inform your tactics.
- List of best companies in your region. They are successful in your region for a reason what are they doing can you emulate it?
- What is big business? Have you ever thought about it deeply, studied it? What makes McDonald’s so successful, for example, what are their tactics?
- Break down the tactics and strategies for at least 10 companies in your city. Are there any that you are doing, improving, or borrowing?
What is the Final Form of your Company?
- A Large Company with all the staffing , overhead challenges, and high revenues.
- A Smaller company that has a high profit margin but lower revenue.
- Does your industry lend itself to forming a small, medium, or big company?
- How does the size of your company change your operations?
- What about the employees you need: high skill or low skill labor.
- How are you animating staff to aid your strategy?
3. Driver: Capital
Not only your revenue or financial capabilities, but your company’s human & intellectual capital as well. Who are your highest performers? Pick their brains and try to replicate their success in the other employees. The more performance of your team, the more leverage you create with your person hours.
Training
Your staff sales staff yields more than your pay them, what is that factor? Is it 20 times, 50 times or 200 times? You can boost this return rate by training sales staff to be more effective in the field.
Training Tactics:
- Bi-weekly sales meetings with training elements
- Weekly sit down with each salesperson
- Professional sales training or coaching
- Technical training like new software, industry knowledge or skills
- What are the mental roadblocks holding your sales staff’s success down?
Capital Expenditures
If you are not tracking what your business spends its money on, stop now create a spread sheet for the following:
- Employee wages
- Equipment & Inventory purchases
- Sub-Contracted labor
- Marketing expenditures
- Technical Services like IT, Legal and Tax
- Vehicle purchase and maintenance
- Employee Training Expenses
If you are already tracking expenses then you are likely in decent shape, but venture to analyze it deeper than you are currently doing. Look at each spread sheet and think if the cost is worth its value, can it be reduced, should it be increased?
Consider the Following Returns on each expense:
- Return on Investment
- Return on Effort
- Return on People
- Return on Activity
- Return on Opportunity
You can’t get the highest and best yield if you don’t first develop a monitoring, measurement comparative system and if you don’t start carefully examining, evaluating, identifying, and observing how your current capital activities perform while evaluating them each against all the alternative ways you could be deploying that same financial, human, or intellectual capital, time, and people.
4. Driver: Business Model
While it will sound a lot like a business strategy, your model is actually different, and we do not mean it is your tactic either.
The model is the system or core process you use to carry out tactics. That could be AdvertiseàSellàinstall/service —a one shot business model, albeit not a great one. Naturally, each step mentioned can also be broken down into its own process to refine your core business model. But how can we enhance a company’s business model?
First start by identifying the front end and back end of your current business model, or which parts are client-facing and not. Then consider the following:
- How can you add another dimension to the client facing parts of your business process?
- A Free Offer regardless of purchase
- A contact point after purchase
- Taking a client who purchases once a year to two or three times a year
- What is the life time value of a customer to your business?
- Where can you up sell but is still low pressure?
- How can you make it safer on the acquisition side?
- How can you make it better on the residual income or institutionalizing the relationship that we have with the client side?
5. Driver: Relationships
Take stock of relationships and networks you are apart of and how you can leverage them to aid your business. Is your company mostly regional? If your business area is contained to a city alone, how can you interact with other business owners in the surrounding area, province, and country. Masterminding and networking with other owners are great ways to learn and pull experiences to implement into your company.
Join local networking events that often have a slot for each type of company to create a referral network where companies recommend client’s to that they are not able to provide a needed service to.
A client who has bought multiple times from you is worthing sitting down with them and buying dinner and picking their brain about their lifestyle. Also, asking them if they know anyone else, they could recommend your business to their family and friends. Either way you have got a referral or learned about your ideal client.
6. Driver: Distribution Channels
By securing strong business to business clients, you can leverage your purchasing power to secure better prices, terms or rebates by offering exclusivity. Alternatively you can actively shop around for better prices from multiple suppliers. Suppliers often have access to benefits and rebates from manufacturers and insight to industry trends.
If you have an established relationship with someone, and add a new product or service, then offering it to a previous client is more pliable.
7. Driver: Your Products and Services
Enhance, add, package and license are the different ways you can redefine your company’s offering. Certain customers buy certain products, this means you have a full spectrum of sales so having a basic to luxury version of your product is a way to capture more buyers.
Adding a new product or service that extends your offer and strengthens your brand. If you are good at selling X what is Y that could also be sold without confusing your core business. There is a reason John Deer doesn’t sell sports cars and Ferrari doesn’t sell tractors though both likely have the expertise and capacity to do either.
Creating packages for your products can be a very powerful way to boost revenues. Some purchases are always made together, like a new car and an extended dealership warranty with the latter being next to impossible to sell after the fact. And while you are buying that new car, extended warranty, why not buy an extra set of keys just in case.
If you have any propriety service or product, licensing it so other companies can offer it, while you collect royalties, is work-free revenue. However, quality control and losing what makes you unique in your market is something that could cost your company.
8. Drivers: Processes & Procedures
Every business mechanism can be broken down into its driving processes and sub processes. Once you figure out what the processes driving an activity are, they can be measured, they can be quantified, and they can be vastly improved.
This occurs when you run an ad, do a sales approach, produce a product, process inventory, manufacture something, shift something, deal on the phone, handle a complaint, perform a service or take an order. And there is massive room in that process for improvement. There are activities that can be vastly improved always!
You may also want to look at processes that you have knowingly or unknowingly perfected that are higher, far superior performing than anything, anyone else in your industry or any related industry use. Because you can take your successful processes and once you can quantify and measure them, you can sell them, license them, or joint venture their use for a share of the improved result they produce for other companies.
Assess The Business
- What do you do in marketing?
- What do you do in selling?
- What do you do in operations?
- What do you do in effectiveness?
- What do you do in management that’s greater than 90% of the other people doing it?
- What do you do in money managing?
- What do you do in achieving high productivity?
9. Driver: Ideology
An owner is not an employee of the company nor is the owner the company itself. However, an owner must work well outside the typical Monday to Friday 9 to 5 box. An owner is seeking everything that the company needs to last and grow into the future. This includes traveling to seminars, conferences, or work sites to learn better ways to grow your business and/or your profits, training your mind, raising your business acumen. You are no longer the widget marker.
An owner is a social butterfly who has no problem taking on all interactions with the best interests of the company in mind. You are no longer able to decline an event because you do not want to travel nor like that particular trade show. It may be possible to transfer some of these tasks to a trusted manger, but an owner need to have the pulse of their industry so they can react to changes before they start to trend main stream. This can only be achieved by being active at all times and seeking all opportunities even if they lead no where.
Does the way you think of your company optimize the company or is it just comfortable for you. In a way the company is its own living machine made up of all the people you employ. You work on the company not for it. Your job is to keep the company living and moving forward.
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