To grow or not to grow? A look at organic revenue growth
The past several years have been extremely trying times for businesses of all shapes and sizes. Organizations that were once booming with activity have seen significant declines in top-line revenue and overall profitability. Some entities have downsized, right-sized or closed their doors altogether. Maintaining the status quo has often been the new measure of success. Nevertheless, businesses who were well positioned to weather the economic storm are now seeking out new opportunities to expand, grow and get ahead of their competition.
Growth has always been a widely debated topic in the business world. How much is enough? Is growth happening too quickly? What is the best avenue for growth? These are just a few of the common questions faced when looking to expand. Many industries have seen growth and consolidation in the form of mergers and acquisitions.
When done right, this can be a viable option to seamlessly integrate two groups with common synergies or provide immediate entry into a new geographic market or service line. However, when done hastily and without proper due diligence, a merger or acquisition can lead to unintended consequences including cultural chaos and, potentially, failure.
Growing your organization can be a daunting task, especially when starting from the ground up. The key is to harness the power of your existing customers, your team members and your marketing plan.
Tap into your existing customer base
Studies have shown that it costs significantly more to attract and obtain a new customer versus maintaining a current relationship. While maintaining relationships is good, growing relationships is even better. Are your customers aware of all of your product or service offerings? Are you taking time to listen to what they perceive as value? Are you asking the right questions to understand their true needs? Current customers provide the perfect opportunity for cross-selling or up-selling. This allows for revenue growth while also increasing your value and solidifying current customer relationships. In addition, these customers become “raving fans” who will vouch for your product or expertise to other potential buyers.
Empower your team members
No one understands your business and its unique value proposition better than your employees. Their period of interaction with a customer or potential customer is often the “make or break” point in relation to the overall experience. Are you addressing each point in the cycle of customer interaction for potential breakdowns? Are you asking for their feedback with regards to the resources made available to them? Are you educating your employees on the importance of their role in advancing the business? Not everyone is wired to “sell.” However, most team members can “market” your business in some way, shape or form. When team members present themselves professionally within the workplace and in the community, it will almost certainly have a positive impact on the bottom line.
Develop a marketing plan
Marketing plans are similar to a New Year’s resolution. They sound good at the beginning of the year, but the flame ultimately dwindles as we fail to stick to our outlined goals and objectives. If your organization has not developed a marketing plan, I would strongly encourage you to do so. Getting something on paper is the first step in documenting your plan so that you can hold yourself accountable. Marketing plans need to be established at the entity level as well as with individual team members. The strategies will be different, and each team member will bring his or her own unique skill set to the table. Do you want to meet with one new prospect per month? Perhaps attend three significant trade shows or conferences? Regardless of your approach, the important thing with a marketing plan is to document it, execute it and measure it. These initiatives will surely lead to new opportunities.
Where do you see your organization in five years? If growing your business is one of your primary goals, it is important to begin laying the groundwork for your future. Most would agree that growth should not be pursued for the sake of getting “bigger.” Bigger is not always better. There need to be ancillary benefits to the growth, most importantly profitability. Expansion needs to occur at a rate that the organization is able to handle and sustain. Well thought out organic growth can provide a steady, stable path to success. Remember to utilize your current customers, team members and marketing plan along your climb to the top.
Chris Frye, CPA is a manager with the professional accounting firm Yount, Hyde & Barbour, P.C. His areas of expertise include assisting clients in the construction and non-profit industries with assurance, tax, and advisory services with an emphasis on strategic planning. Frye is a member of the Virginia Society of Certified Public Accountants.