Very often businesses want to grow.
As their accounting professional, you are one of the best people to help them do that.
Growing a business is about understanding the numbers and developing core strategies for growth. In any business, there are 3 main ways to grow.
The marker for growth tends to be measured by the top-line sales. We are always striving to increase sales. The problem is, you can’t manage sales directly. It’s the end result of a series of other processes.
If you had a business with 100 customers, and each of those customers bought on average 4 times a year, you will have 400 transactions in a year. If each customer spends on average $100 on each transaction, then your annual sales would be $40,000.
Here’s that equation:
When you understand that math, it then becomes much easier to help your clients grow their business. If you are offering a business advisory service, it will be your job to help the client understand these numbers and work on increasing all 3 simultaneously.
The mistake most business owners and accounting professionals make is to focus all their efforts on one part of that equation – winning more customers.
Yet, winning new clients is actually the hardest of those 3 areas to focus on – and it’s not the most effective way of growing a business. You should focus on the other 2: Frequency and Amount.
Nevertheless, let’s look at all 3 areas…
Accounting professionals are obsessed with winning new clients. Most think it’s the best way to grow a business.
So, when I ask accountants and bookkeepers what the best way to win new clients is, the top answer is always referrals.
It’s a great way of bringing new business in.
However, I then ask:
“Given that referrals are the best way of bringing in new clients, how many systems do you have in place to get those referrals?”
Most people look blank. They don’t have any systems, they just rely on luck, chance and the good nature of their clients.
Referrals are so powerful, you need to have systems for getting them. Marketing doesn’t have to be scary and daunting – it could be as simple as having a referral system.
Let’s say you have 100 customers and they each buy 4 times a year.
If you could get each customer to buy 5 times a year, that’s a 25% increase in frequency, and when you do the math, it’s a 25% increase in top-line sales. That could have an extraordinary impact on bottom line profits.
A great way of getting your clients to buy more often is to have a next sale script.
Every time a client buys from you, you should have a script prepared to get them to buy more from you, or to get them to buy a little earlier than they normally would.
The final growth strategy is to get your clients to spend more each time they buy.
There are many different things you can do.
One of which is to offer a bundle – like McDonalds do with their meal deals.
You may walk into McDonalds thinking you just want a burger. But when you see the meal deal option with fries and a drink for a great deal, you might end up spending more than you originally thought.
That might take the transaction from $3 to $4. The extra dollar might not seem much, but it is a 33% increase to the amount people are spending, and if that happens consistently across the entire business, it’s a 33% increase to top line sales.
If you want to help your clients grow their business – if you want to grow your own business – you need to understand the math. This mathematical model sits behind every single business.
Sales is made up of a series of drivers, these 3 being the primary drivers. When you focus on each driver individually and help the client understand the numbers, you can deliver exceptional value.
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Wishing you every success on your pricing journey.
Chartered Accountant, Public Speaker and Author of Amazon No.1 Best Seller, “Effective Pricing for Accountants”
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