Here’s The Backwards Way To Think Of Your Business Growth
by Mike J. Agugliaro
If you’re thinking of business growth for your service business, perhaps you’re looking at what is making you money right now and thinking, “if only I could do more of this then I’ll make more money!”
So you see that you’re running a whole bunch of calls and you try to figure out how to do even more calls.
… But chances are, you’re already busy. You’re already bogged down. You’re already running full steam ahead. Maybe even you’re already maxed out.
… And maybe you are maxed out but all your money is going to your expenses so you just don’t have the capacity to invest in growth.
If that’s the case then you just don’t see how to grow your business without making a larger investment into a bigger team, more trucks, etc.
But there’s a better way to grow… yet it’s counter-intuitive to the way most people think of growth. You have to SHRINK to GROW.
Yes, you read that correctly. You have to SHRINK to GROW.
Here’s what I mean: let’s say you have 100 calls and you’re running those calls the best you can but it fills your time beyond capacity so you get home each night and you are burnt out. It’s bringing in just enough money to keep you afloat but not enough to help you build wealth.
Instead of running all 100 of those calls, you should go through them and weed some of them out: It is better to have 100 calls and go through them and sort them first and decide which you can serve and which you cannot serve!
If you do this properly you will be able to bring things to a higher level. You can sift through the calls and start with the ones that will make the most profit. Work at them from directions. Yes, you might not have time for some of the calls, but this way you are losing the least profit. You still do the job well, and you still serve the customers well (this way your reputation stays intact).
You will have a higher conversion rate. You’ll have better customers, better average invoices and things will be better in general.
Jack Welch is famous for saying that the bottom 20% have to part ways. Look at the truth, the bottom 20% of your customers will not be even close to 20% of your profit. If you cut them off, and sent that extra time serving your top clients, you will make more money!
So, where to start?
Go through your list of calls and arrange them by most profitable and least profitable. Then, remove the 20% least profitable projects and figure out what to do with them (maybe cancel those appointments or hand them off to another company to serve them? There are a number of ways you can play this and even profit from them!)
Then, go to the 20% of your calls that are the very best and most potentially profitable and serve them at a higher level. You’ll give them more time and more focus and they’ll likely buy more. You probably won’t even miss the smaller ones!
Bonus tip: figure out the key differences between the top 20% of your customers and the bottom 20% (that you got rid of). Ask yourself: “demographically, what makes them different?” and, “where did the top 20% of my customers hear about me that the bottom 20% did not?” These two questions will help you craft a clearer picture of your perfect customer and also illuminate the best places to market to your perfect customer so they are more likely able to hire you. (For example, if your best customers met you at a home show but your worst customers nearly all found you through a billboard, which seems like the better marketing effort and which one could you eliminate to save money?)