Most entrepreneurs use revenue growth as one of their markers of how well the company is doing. Over time, profits should rise steadily despite monetary output for advertising, employees and other expenses every business has.
What is a Good Annual Revenue Growth for Small Businesses?
The average small business owner makes just a bit above the median wage for employees in the United States. The average worker makes around $58,260, while the average small business owner makes around $60,151.
Labor is still the top cost for businesses and hits about 70% of overall spending, with inventory as the second highest expense. How can you think of revenue growth in new ways, to improve your bottom line and get a fresh take on how to move forward.
Has Your Small Business Been Thinking of Revenue Growth All Wrong?
1. Analyze Current Growth Rate
Before you can figure out how best to grow your revenue, you must understand current trends and statistics. Spend time digging through records and figuring out the annual growth rate for your company’s revenue.
Get some outside advice on where you’re failing to make the most of income potential. Perhaps you can work on closing more sales or upselling to current customers.
2. Embrace New Trends
Buyer needs are driving growth. Customers are exploring and researching more during the buyer’s journey. Around 60% of companies are looking to adopt new media efforts to successfully secure new revenue.
Keep tweaking the buyer’s journey to funnel people from landing pages to becoming customers. The more you can refine the buyer’s journey, the more likely you’ll see revenue growth.
3. Add Complimentary Products
What can you add that your current customer base would be most interested in? One example might be a children’s clothing online retailer offering cute outfits for toddlers. If they want to increase revenue, they can add matching outfits for mothers or sibling sets.
Make sure whatever you offer is in addition to what you already sell. You want it to be an add-on and not an “instead of.”
4. Focus on Customer Experience (CX)
Are you dealing with an oversaturated market? One way to grow revenue amidst stiff competition is to provide the best customer service imaginable. Survey your customers to figure out what they expect when they do business with your company. Do more than just meet expectations–exceed them.
Some examples of companies with steady growth and excellent CX include Zappos shoes, who once overnighted shoes for a wedding and Whole Foods who went out of their way to help an elderly customer get groceries during inclement weather. Think about how you can go above and beyond for your clients.
5. Refine Your Pricing
At what point does pricing saturation occur with your products? You don’t want to undercharge or overcharge. Raise your prices too high and you risk losing customers to a competitor that charges less. Keep them too low and your revenue will stagnate or reverse as your supply costs outweigh your revenue.
Figure out what the perfect price point is that brings you profit but is acceptable to your customers.
How to Thrive as a Small Business
If you want to increase profit year over year, you must look at revenue growth as a marathon rather than a sprint. Make small adjustments in increments and see how different methods work for your target audience.
Revenue growth happens in a variety of ways. You might see an increase in customers or add a new segment to bring in more money. Or, you might sell more items to the same number of people. Whatever method you choose, you should frequently reassess your methods and make any tweaks needed to find success.
Ciao,
Miss Kemya
