Be Where Your Customers Are
Don’t do whatever is “hot” now. Different experts recommend different (sometimes opposed) tactics. Think about this: “gurus” don’t know more than you; they’re just better at marketing themselves and positioning themselves as experts. If you’re a mildly successful small business owner, you’re making more money than 85% of the “gurus” out there.
Instead of blindly doing what experts recommend, be where your customers are. Advertise in the magazines they read, the TV shows they watch and the radio shows they listen to. Join groups and Meetups where they get together. Participate in the blogs they read. If they’re using Google to find companies like yours, do search engine optimization to rank at the top of Google. Be where your customers are.
Be Where the Money Is
I think the main reason a lot of small business owners don’t make as much money as they want is that they never stopped to think about this universal truth:
Revenue = Number of sales X Average order amount.
In other words, if you sell t-shirts or any other low-ticket products, you’ll need volume in order to make a lot of money. On the other hand, if you sell very expensive products, you can get away with making fewer sales.
A lot of businesses sell $10-$100 products but don’t sell millions of them, so the math just doesn’t work out. So here are three ideas for you:
Start selling more expensive items
Sell a product that creates recurring revenue for your company (monthly retainer, subscription, etc.)
If you sell low-priced products, go for high volumes. How likely is it that your tiny website will sell a million granola bars a month? Wouldn’t it be a better idea to get your product into Whole Foods, Vitamin Cottage and other organic food stores across the country? They already have access to millions of consumers every month. This is not to say that you can’t reach end consumers as well, but keep in mind that you need a strategy to reach to millions every month, which requires very out-of-the-ordinary ideas (meaning that you have to stop being so conservative and take a chance on something crazy) or a big advertising budget (it’s really easy to reach a few million people if you’re willing to pay for it. If you don’t have the funds, look for an investor or work on creative financing solutions with your advertising partners.)
Focus on Your Core Business
Every time I say this, 99.9% of people don’t believe me, until they try it for themselves. So, I don’t expect you to believe me. I invite you to give it a shot.
Make a list of all your customers and customer segments, and then figure out which are the most profitable ones. Make a list of all the products and services you offer and find the ones that make your company the most money. Do this analysis with everything you do: marketing tactics, products/services, customers, etc. You’ll find that some things you’re doing are extremely profitable and some aren’t. Get rid of the latter immediately.
You might be wondering, “Won’t I not make any money if I turn down business?” Yes, initially, but I’m willing to bet you can double your profits by focusing your efforts. Here’s why:
You’ll be saving a lot of time that you can spend doing the things that work best for you.
You’ll become a specialist in a product/service and a industry/customer type, which will help you increase your perceived value (which means more customers and higher revenue per customer.)
You’ll become a market leader in one area instead of being “just another company” in ten different areas.
I’ve never seen a company planning to make $250,000 and actually making $10M+. This is because the plan that will get you to $10M+ is very different from the one that will get you to $250,000. You won’t believe this either, but aiming for a goal 10 times bigger takes 25% more work, not 10 times more.
Again, don’t just believe me. Try this for yourself. Go big. You’ll find that because so few people aim high, the competition at the top of the food chain is much less than at the bottom of it.
Step Away from Your Computer
I love technology, but real business deals happen when you actually meet with people (and sometimes over the phone). There’s nothing wrong with using email or social media to complement the communication with business partners, but don’t make it the sole communication channel.
The reason is that social media and email are very crowded spaces. Think about this:
How many tweets/Facebook posts/emails have you seen last week? How many people have you met in person?
When you meet with people, you have their full attention, whereas when you send people tweets or emails, they’re competing against all the other tweets/emails for your recipient’s attention.
Once again: I’m pro-technology. I have every gadget you can imagine. But, you need to know when and how to use it.
Get Out of Your Comfort Zone
Growing is not comfortable because you’re doing something you’ve never done before, and that’s scary. In my opinion, however, it’s good to be scared. You’re either scared or stuck.
I remember the first time I spoke at a marketing seminar. It was horrible. I was nervous the whole time and I thought my presentation was awful. That was, until everyone told me how helpful it was for them. The second time I was a little less nervous, and the third time was better than the second time. Now I have no problem speaking in front of thousands of people. As with everything else, you have to acknowledge the fear, accept that new things are scary and do it anyway.
The fear will eventually fade away and you’ll get much better at whatever you decide to do.
Entrepreneurs these days have ADD. They start doing something, two weeks later they find something more interesting, and two weeks after that they switch to something else.
Most businesses take two or three years to become profitable and pay their founders well. This is because at first you’re learning about your industry, your customers, the effectiveness of different marketing strategies, etc. Don’t give up too soon. Learn from your mistakes and improve your business constantly. And don’t forget to work your ass off; it’s the only way to success.