Driving Profitability at Every Stage of Your Business

How, and why it’s done 

If I had to ask you, as a business owner or entrepreneur, “What is your biggest goal for your business?” I am willing to bet that the answer would be something to do with profit maximization or sustainable growth. That’s what we all want, none of us are here for a quick buck, or to start a business that’s doomed to fail. We are in it for the long haul, our business is our baby! 

Looking at it simply, it’s pretty easy. You want to grow your topline? Increase your profits. You want to expand your team? Hire a few trainable interns. Business is not rocket science, what it is, is a series of relationships that are nurtured to the point that they provide a sustainable and predictable profit. 

Growing a business, and reaching a sustainable profit need to be done together – (they don’t, as much as it would make things simpler), operate in isolation. So how do you achieve both? Entrepreneurship is a path filled with challenges, but finding a way to achieve both growth and profitability is probably one of the biggest challenges we face. 

According to the model defined by Daniel Marcos of The Growth Institute, businesses need different strategies for profitable growth depending on where they are in their development. Marcos classifies businesses by number of employees into “startup”, “grow up”, and “scale-up” . This is because employees are a better measure of the complexity of the business than traditional metrics like revenue, which can vary depending on industry.

The key is to have an eco-system that serves to combine strategies – at each stage of your business journey. We all start somewhere!

The Startup 

For any business that is in the startup stage of their growth cycle, the focus should always be on total revenue. At this stage you are still working on your business model, and ironing out the kinks that you find along the way. At this stage, you’re about proving the legitimacy behind your model, and breaking even. In other words, you’re not running a loss. 

  • Include your own compensation 
  • Identify, and focus on your most profitable customers 
  • Account for all business and operating expenses, and cut where necessary

All of these points are critical, if you miss out on any of these – particularly the focus on profitable customers, it makes the next stage of your journey that much harder. 

The Grow Up
Growing a business that operates beyond yourself means that you need to build processes and strategies around your deliverables. This is why your profitable customer matters – there is little to no use in implementing a powerful system, if the profit is unsustainable. 

Growing profitably in the “grow up” stage is all about adding the right revenue. Analyzing your gross profit allows you to determine the customers you want to build processes around.

  • Understand that not all customers are good customers – if there is little room for profit, you’re wasting your time, money and effort 
  • Focus on longevity, nurture your customer base to the point that they return
  • Consider your pricing strategy and margin 

Once you’ve found your groove in the “grow up” stage of your business, you’ve attracted and maintained the right customers, and you may even have a team that supports your vision, you’ll find yourself moving towards the next stage. 

The Scale Up
At this stage – you have hopefully realized that sustainable growth is not always, and often never – fast growth. They say that overnight success takes 7 years! While it may seem disheartening, always keep your end goal in mind. 

To move into the “scale-up” phase of growth, you must focus on the cash flow aspect of your business. Many companies grow too fast and flame out. This is because they outrun their people, systems/processes and capital. In order to not outrun your cash flow, you must have a clear idea of the cost of acquiring a new customer. 

  • Optimization of Digital Assets 
  • Marketing that justifies its cost 
  • Maximization of operational profitability
  • Training and upskilling your employees 

While we are all at different stages of our business journey, there are steps along the way that shouldn’t be ignored, and are applicable at every step! 

There is no one size fits all approach to growth and profitability, but ultimately utilizing the above, and below strategies is a sure fire way to grow both your business and your profit. 

Here are the practical tips, regardless of your stage. 

  • Really get to know your customers – on a personal level
  • Always focus on impeccable customer service
  • Nurture existing customers to foster loyalty, and use lead generation tools to expand your pipeline 
  • Optimize your Digital Assets 
  • Network – in person and online 
  • Measure what works, and be open to refining your approach
“Your success is a different colour to mine, the key is to identify the goals, before you outline the obstacles.”

Daphne Thomson

Through a combination of devised strategy, actionable items, identification of waste, and output management, I guide you step by step  through a path that gears your business to our pre-agreed outcomes.

  • Fractional Chief Marketing Officer 
  • Marketing and Sales Consulting 
  • Operations Consulting 
  • Wealth Creation Consulting

Help me optimize my business!

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