The only 3 ways a business can grow

in HiveHustlers2 months ago

money2724241_640.jpg

If you search the internet for ways to grow your business, then you will get millions of results. All very unique ofcourse.. But I can make it easy for you. In reality there are only 3 ways to grow your business.

They are:

  1. Growing the number of customers
  2. Growing the size of the transactions
  3. Growing the frequency of the transactions

If you are trying to grow your business, it is very likely that you focus on one of these 3 ways to grow your business. But if you do that, then you are missing out on the potential of your business.

Let’s say you have an automated process for your business and you focus mostly on getting new customers through advertising. This might give you a nice flow of income, but your growth will be related to your advertising budget.

If you are not investing time to think about ways to increase the transactions or the frequency of the transactions, then you are missing out on a huge potential for growth.

Let’s say you manage to grow the monthly amount of new customers by 10% through some more advertising. But along with that you also manage to grow the size of transactions by a factor 10%, because of an upsell opportunity that you created. Finally you also increase the frequency of transactions by 10% by bringing out new versions of your product faster, incentivizing people to upgrade to the new product. This is then not a 30% growth, but 33,1% growth.

Now you might think that cost savings are a way to grow, but I disagree. Cost savings do not grow the size of your business, they only provide a means to pay yourself a bit more, or invest in one of the 3 growth categories.

So if you have a business, then analyze for yourself if you are growing in all 3 categories. If you find that you have neglected one of them, then take some time to think about a way to change that. It might be the easiest way to realize growth at this time. But even if it isn’t, then still it could be worth looking at.

From now on, I encourage you to regularly ask yourself if you could improve on each of these 3 categories. If you do that, then I am sure that you will start to outperform the competition. Because generally businesses really only focus on one of these.

I’d love to hear what you think and help you figure out how to grow your business. So if you have any questions, then do comment and I will certainly give you an answer.

Thank you for reading and now grow that business!

Sort:  

I have never think about it in this way...

Growing the number of customers
Growing the size of the transactions
Growing the frequency of the transactions

I mean, I maybe know this, but didn't think that it is that simple :) Great post!

Sometimes simple is very profound

Great advice there, and the best is as you say to focus on growing all of those numbers at the same time, and thereby we also have a greater growth overall, keep up your great work.

Thanks, I’m glad to be able to share some valuable info.

Those 3 ways you talk about for building your business are right on point, you don't need to focus on much more. Great information.

Absolutely, I’m going to write another blog post soon about linear versus exponential growth.

Expanding on that idea of growing multiple sides of the business rather than only one source of growth.

I enjoyed your post. With regards this:

Growing the number of customers
Growing the size of the transactions
Growing the frequency of the transactions

In my business, holiday letting, I can only do number 1 and 3. I don't have much control over the pricing as each owner (my customers) decide the asking price for their house per night of which I get a set percentage.

Thank you for writing.

Oh, what is that? Holiday letting? What is the product you offer people?

You might not have absolute control over the prices your clients set, but I think I can come up with 5-10 ways you could increase the size of the transactions anyway.

I let out holiday homes for the owners and they make the prices. The market is very competitive. If your prices are too high you price yourself out of the market.
So I do the marketing, get the bookings, book the clients in and out.
You sounds full of ideas 🙂 I will try to think of ways.
Thank you for replying

I just read your post, am I correct in thinking that you manage all the practical stuff for the house owners? The only thing they do is seeing the price for their holiday home? Is there anything else they do themselves?

Yes, I do everything except for handling the money myself. They pay directly over into the owner's bank account and the owner pays over my 20% on the accommodation.
I market the house, made the reservation, all correspondence with the client. Afterwards I do an inventory and report on breakages. Owner refund the breakage deposit.
Some houses we do the cleaning too but for that we ask extra.
Have a great weekend further.

I think you have one major benefit over your customers. That is that you see all homes, while they only have their own.

So you can see what works, what seems to draw more visitors.

Obviously price is an important factor, still some are a bit more expensive and draw more people anyway. Why is that.

If you could advise your clients about upgrades they could do to earn more from their home, then you could earn more as well in the process.

They should really use this low activity Covid19 time to improve a few things in their holiday home to be able to earn more money from it.

If they are in the same area, you could perhaps negotiate a package deal with a contractor.

If you can provide your clients with info like: if you add feature x then you could increase prices per night by x. Then this really valuable for them and helps you to increase the size of the transaction.

Very good advice, thank you, I will see how I can implement it.
!tip

You’re welcome! And thanks for the tip!

🎁 Hi @invest4free! You have received 0.1 HIVE tip from @hope777!

@hope777 wrote lately about: My Hustler Struggle - A True Story. Feel free to follow @hope777 if you like it :)

Sending tips with @tipU - how to guide.