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To say that Covid-19 has thrown businesses for a loop would be an understatement. Yelp recently reported that, of the more than 160,000 U.S. companies that have closed since the start of the Covid-19 pandemic, 60% are now shut down for good.
With businesses across the country struggling to keep their doors open, scaling your company in this economy might seem like a pipe dream. Not necessarily, says Charles Gaudet, CEO of growth consultancy Predictable Profits: “While we are in a challenging environment, you will find companies in every industry having their best year yet. Those succeeding are adapting, looking for the opportunity and using data to make fact-based decisions.”
If you’d like to join the ranks of companies that aren’t letting Covid-19—or future crises—stand in their way, take these three steps to scale your business now:
1. Identify where your growth will come from.
In a strong economy and with a strong product, sales practically make themselves. These days, you won’t be able to grow your business without an eagle’s eye for market opportunities.
Will you be providing new products or services? Marketing your existing offerings to new demographics? During the pandemic, many leaders have had to reconceive their products and services—often turning on a dime—just to keep from going backward.
Say you’re a sales speaker who has watched your chief source of revenue, keynote speaking engagements, dry up overnight. Consider sharing your insights via webinars or turning them into online corporate training modules instead. Suddenly your service is a product; what’s more, it’s a scalable product.
“You can make it with a service business model if you can solve the scalability problem,” says Steve Tobak, a management consultant and author of Real Leaders Don’t Follow, “But it’s a lot easier to build a sustainable business by developing and selling or licensing products.” A productized service can potentially solve the same problem for thousands of customers.
2. Scope out your ideal customers.
Additional customers are obviously key to business growth. But successful scaling demands that you identify the right kinds of customers.
If you attempt to sell to customers who aren’t right for your product or service, it will take longer, be harder and yield less profit. And if you customize your offering for too many potential uses, your chances of delivering it in a cost-effective manner will plummet.
Maybe you’re one of the pandemic’s many face mask makers, but face masks for whom? You could be providing plain-Jane masks in bulk to retail employers, or you might be envisioning your vibrant West African prints on the faces of racial justice activists. Competitive intelligence tools like Alexa can bring your ideal customer into focus, helping you expand your niche.
Once you’ve determined whom you want to reach and where to reach them, it’s time to craft your message. “Because it takes more time and resources to establish yourself in a new market, the easiest way to grow a business in a downturn is to change the message to meet the new needs of the market,” suggests Gaudet. The key is to state your offering’s value clearly, concisely and in an attention-snagging way.
3. Create a sustainable sales function.
Without a clear understanding of your product’s value and your target customer, even veteran salespeople will struggle. Once you have them, it’s time to scale your sales team.
“Your product roadmap is about making your target customer successful, not just signing up any and every customer,” explains Mandy Cole, former VP of Sales at Zenefits and founder of RiSe Accelerator. “If you’re just chasing every target that’s out there, you’ll never gain the efficiency you need to build a really high-performing team.”
Efficiency is what separates scaling from mere growth. Adding resources as fast as you add revenue amounts to treading water. By selling to the right people, you increase efficiency in at least two ways: You shorten your sales cycle and reduce customer churn. Remember, increasing your customer retention by just 5% can boost profits by 25% to 95%.
You can also achieve greater sales efficiency through optimized processes. Before you even think of adding more reps, you’ll need to expand your sales funnel. Begin by determining how much revenue you need to bring in, then calculate how many deals will be needed to reach that figure. Your head of sales should help you write this playbook, as well as assist in hiring new reps when the time is right.
Scaling is easy when the economy is doing well—but what about when it’s not? Savvy business leaders are finding that with a combination of agility, data-based decision-making and supporting technology, they can keep their companies moving forward, no matter the circumstances.
