Many business owners are anxious about the future. In previous articles, we discussed how cash flow management can help you take control of the cash during a crisis. However, how do you take control of your revenue? In this article, we discuss four steps you can take right now to increase your revenue.
1. Know your Revenue Mix
Your revenue mix (or sales mix) is the proportion of products and services that make up your total income. Most small businesses offer a variety of products and services and may track them among three to four categories in their accounting system.
The first step to understanding your revenue mix is to have up-to-date records, with different sources of income categorized in a way you understand (We can help you with that!).
Make sure that you look not only at the income but also the profit generated by your products and services. Income and profit are not the same thing. Your income will only tell you how much came in from your customers. Profit helps you see both the income and the cost of providing that product or service.
As you review your revenue mix, ask yourself:
- Are there any opportunities to expand or create new products/services from the ones you already offer?
- Are you charging enough for the current products/services you provide?
- Are there any products/services that should be discontinued because they are no longer profitable?
2. Know your Current Customers
You may be anxious to attract new customers to your business. However, is it possible that you could provide additional products or services to the customers you already have? When you know the makeup of your existing customer base, you may be able to identify new opportunities.
If your business uses a CRM system to track customer information, this is a great tool for this task. If you do not that’s okay; use whatever system you have that contains the customer data. As you review your list of customers, try to identify common trends that can help you spot opportunities.
Here are some good questions to think about as you review:
- What products/services are your customers currently buying and how often do they purchase?
- Do your customers live in a particular region or come from a specific industry?
- If you follow my customers on social media, where else are they visiting and purchasing online?
3. Become the expert
Today, customers do much more research before they decide to purchase. They want to feel that they can trust in what they are buying. To establish that trust, you want to promote yourself as an expert in the products and services you provide.
Prospects may not buy from you today, or even tomorrow. But they will remember you as someone who answered their questions. That trust will lead to sales.
How do you accomplish this? You may need to shift from being a salesperson to a teacher. If you are interested in some reading, I highly recommend the book, They Ask, You Answer by Marcus Sheridan. In his book, Marcus discusses that the key to marketing any business is simply this: Just answer people’s questions.
Here is an exercise to help you with this idea. Create these two lists:
- What questions have customers or prospects come to you with in the past 6-12 months?
- If a potential customer is interested in a product/service that you offer, what should they know before and after they buy?
Answers to the questions above can be the source of your marketing. Simply answer one of those questions with a post on your social media or website. You can even create videos or webinars answering these questions. Prospects may not buy from you today, or even tomorrow. But they will remember you as someone who answered their questions. That trust will lead to sales.
4. Get Creative
Let’s say you have applied the previous three steps to increase your revenue. You have identified your income and profit. You have examined your existing customer base and compiled some common questions that can help promote yourself as an expert. Now comes the fun part. We put all these steps together to create new sales strategies!
Here are some questions to help you get the ideas flowing:
- Can you pivot current services to a new format, such as online?
- If you cannot currently provide my services, can you create content to teach others how to do it and then charge for the training sessions?
- Are there any new markets where your products and services could be sold?
Maybe a few real-life examples will inspire you:
One of our construction clients discovered that when their home builds were resold, the new homeowner often had questions about maintenance. In other cases, the homeowner for a recently completed build requested their firm to handle on-call maintenance or additional remodel projects. By identifying these common situations, our client added a new division to their firm that exclusively handles ongoing property management and smaller remodeling projects.
We have a consulting client who prior to 2020 did the majority of his training workshops in an in-person classroom environment. When the pandemic hit, this method of training was no longer possible. What did he do? First, he created social media posts and a video podcast series where he answered common questions with other experts in his field. Then, he pivoted his training workshops to a virtual environment.
Here you can see that by applying some of the steps discussed in this article, you can find creative solutions to increase your revenue. Set a goal to apply one or two of the steps above within the next three months. You may be surprised at the outcome!