The Five Pillars of Business Growth

There are five factors at play in determining business growth. Mathematically, if you can create an improvement of just 15% in each of these departments, your business will double.

Firstly, business is not about how much you make - it's about how much you keep. In short, it's not about turnover, or even gross profit - it's about net profit.

Now, consider these five factors. For the sake of simplicity, we use the example of a restaurant:

1. Getting more customers - for most people, this seems like the only option - and they chase it day after day. However, it is only one building block in the growth of your small business. Let's say you start off by simply asking your customers to recommend you to their friends.

2. Making more profit per sale. Now this may seem like you have to run up high prices, but no. All you have to do is increase the net profit.

For instance, in a typical (profitable) restaurant, the final profit margin is around 20%. So on a plate of food selling for R100, the net profit should be R20. In order to up your NET profit by 15%, you only need to increase the price by R3. Do you think your customers will complain about the price being R102.95? It is rather unlikely.

3. Selling more items per sale - Now this is where many businesses fall behind - usually in how the staff is trained. Remember the old American expression "do you want fries with that?" It is a typical offer for an add-on. ALL the profit on the add-on sale is profit you would not have had at all. In a restaurant it would be an offer for a nice sauce, or a side dish, or a new cocktail. It all adds up. Not everybody will take you up on the offer - but those who will, is bound to quickly add on to your existing profit.

4. Make more sales (as in more regularly) - now this may not be an available to say, a real estate agent. But in most cases, good service and a touch of salesmanship will keep your customers coming back more regularly. For instance, the restaurant could do theme nights from time to time - which will (for that night) bring back some customers that would otherwise taken longer to return.

5. Extend the lifetime of the customer. Make an issue of finding out what your customers want, and give them as much as possible. The longer you can keep him or her around, the more money you stand to make.

Not all of these options are available to every business - but do try to apply as many of these as you can. Even if you can only make minute differences in each department, the end result will be the result of accumulated improvements.