Business tip – Three activities to grow your business
Content provided by Sanlam. See Financial Solutions for Business Owners, for tailormade financial advice.
It is said that business is simple, but it is definitely not easy. This article aims to highlight three ways in which businesses can grow.
1. Recruit new clients
This is the most difficult and most expensive option and the value your business offers, the ability of your sales staff, your marketing strategy and the extent to which the quality of your product/service meets or exceeds that of the competition, are determining factors in the arsenal of tools at your disposal in persuading consumers to buy from your business.
2. Sell more to existing clients
Follow an aggressive price strategy. In other words, package a service/product at special discounted prices – you do not need to recruit new clients.
3. Sell to existing clients more often
Consider a loyalty card or a discount strategy for frequent purchases
In order to make informed decisions with regards to a suitable strategy, especially to sell more to existing clients, the following dimensions for business growth must be taken into consideration. The underlying assumption is that reliable client and management information is available.
- The size of the existing client base
- Average spending per client
- Frequency of spending
- Doing a sensitivity analysis – What would the business' turnover be if there is for example an increase of 5, 10, 15, 20 or 50% in client spending?
- Consider proposals to increase the transaction value. (Ways of "up-selling")
- Consider proposals to increase the frequency of purchases
There are many side-line activities that can be considered to increase a business' turnover and profit. However, these three tools/activities form the basis for further consideration.
Article written by Jannie Rossouw, Head: Sanlam Business Market
Copyright © Sanlam, 2016