Your business is clicking along. You have enough business that you are not in excruciating pain, but you aren’t living on easy street either. When you are in this place you are working extremely hard. You’ve set a good pace with a lingering concern about how long you can maintain it. This is wear I typically ask you, “Do you know where your sweet spot is for business growth?”
The key is you need to map your business growth out. Yes, number fun I know. This short but vital exercise is worth it, because you not only gain insight, but you also bolster yourself with confidence by seeing the road ahead. You can set markers at each milestone of business growth that tell you what you need to get to that next level.
Walk through this business growth scenario for a Yoga studio, then replace the unique aspects of your business in its place to determine your optimal path.
BUSINESS GROWTH ESSENTIAL 1
Question: What is your current state? Consideration: Dig into the data by understanding how many customers you have, how long they’ve been with you, and what they buy and how often. Take a close look at who these customers are, their similarities, and how many of them fit your idea of what you want for a customer. Are there any cycles you can see on your sales, such as high times and low within days, weeks, months or seasons? What is your churn or turnover rate, for example for every four customers you gain you lose one within two weeks. When you map all of this out, what is your income by week, month, and quarter. If you can do this back by at least three years it is best to provide a descent perspective for you to work from.
Yoga Studio Snapshot
Total Client List: 1250 *represents your easiest pool to drive more business from
Total Paying Clients: 500
Monthly Fee ($150): 175
Punch Card Fee ($100): 125
Drop In ($18): 100
Monthly Gross Revenue Total: $40,550
BUSINESS GROWTH ESSENTIAL 2
Question: What is your desired state? Consideration: Take the exact business growth data fields above, delete the data then replace it with what you see as being the ideal numbers for your business. Ultimately, this information serves as your business growth goal line.
Yoga Studio Snapshot
Total Client List: 5000
Total Paying Clients: 750
Monthly Fee Clients: 500
Punch Card Fee Clients: 200
Drop In Clients: 50
Monthly Gross Revenue Total: $95,900
BUSINESS GROWTH ESSENTIAL 3
Question: What are the barriers to achieving your business goals? Consideration: There are many things that get in the way of your goals from reality to self-imposed barriers. It is beneficial to separate the two to you can effectively attack each of them as you go. Take into account resources that may be required to overcome barriers and costs associated.
Yoga Studio Snapshot
Reality Barriers: Currently, the studio runs 15 classes per week with a maximum capacity of 10 people per class equalling 150 clients serviced per week (600 per month). See the issue? Their current set up does not allow them to reach their goal of 750 per month. Solutions may entail revisiting their goals, adding more classes, reconfiguring how a class fits into a room or deciding to expand their space. RESOURCE ALLOCATION: After running the numbers, the owner decided to not only add more classes but also reconfigure the rooms to squeeze in more clients. This meant hiring one instructor, training existing staff on new class layout, and putting in a mechanism to track customer satisfaction around this change.
Self-Imposed Barriers: Currently, the owner does not feel there is enough time in the day to do marketing or sales. She also does not enjoy doing those activities, nor thinks she has the skills to administer. Therefore, business growth takes a back seat to whatever else she decides to put her attention on even though they are not the right things. This situation and mindset are controllable. RESOURCE ALLOCATION: The owner began scheduling a dedicated 45 min each day to these efforts and engage in local Meetups to gain more knowledge in marketing and sales.
Business Growth Conclusion
Growing your business should be fluid, but must have goal lines with a corresponding road map in place. The devil is in the details so begin collecting every bit of data you can on your business. Even if you are unsure how to use it today, data can be invaluable to the future growth you desire in the tomorrows to come.