I received this question form a lady working from home, she emailed and explained her business had started of well, she got some clients and kept her costs down. But her turnover is not high enough and she wants to grow her home business. Interestingly she does not want to grow the business more than 20 to 30%, she wants to stay at home with her business. This is not unusual for many small businesses and start-ups, a home business is an ideal way to run your own business.
Getting back to her question, there are really four answers:
- Increase the number of customers – this in turn will increase the your turnover, yielding the extra business you want, while at the same time make your business more recession proof;
- Increase the order frequency from your existing customers – this could be more difficult, you need to find out if you can replace someone else as supplier, or diversify your offering;
- Increase the average order value – same as before, offer higher quality or premium service.
- Increase your own efficiency – outsource more if you can, cut costs this will not grow your turnover, but increase your bottom line, so you can take more money out of the business for yourself.
Once you start thinking about these options you will find out what you can do, often it is a combination of things to do. But you need numbers, so plan your business, get an overview and find out where you stand.
Remember what you can measure you can manage. ST.
Disclaimer: As with any of my readers questions, I do not have all the answers and here on my blog I can only give you some ideas, since I know very little about your small business. If any of you can add anything here do so for the benefit of my reader, who asked the question and everybody else, leave a comment below – I’d be most grateful.