Normal companies strive to create profitable growth, whether they’re here in South Carolina or in the farthest reaches of Alaska. Profitable growth, if you’re unaware, involves achieving growth and profitability simultaneously, challenging the past notion that companies should grow first, then focus on profitability later. This article discusses three easy ways businesses can enjoy profitable growth.
Find Your Profitable Growth Opportunities:
Where are you right now? Take a look at your company honestly. What’s your field? What products do you produce? What products do your competitors produce? Are they better?
In short, take stock of everything! Once you have a realistic look at where you are, where your competitors are, how your products compare, etc., start looking toward the future. Where can you go from there? How can you improve upon your current products to catch up with your competitors? Or, better, how can you improve upon the industry leaders’ products?
Through careful planning and innovation, you can introduce something new and highly profitable to the market, or perhaps change how your product is delivered the market, thereby creating a new source of income. This profitability may require bringing in new employees, opening new facilities, etc.
Hire People with Diverse Skill Sets and Empower Them:
People always talk about hiring based on ‘cultural fit.’ While that certainly sounds great, it can also lead to stagnation. People become set in their ways, or seek to conform with their friends. Sometimes, what you really need is someone to come in and challenge the way you’re doing things and present new, fresh ideas.
That isn’t to say you should go out and simply hire people who are contrarian. Rather, find people who come from different educational backgrounds, who have different work experiences, who possess different skillsets.
By adopting this strategy, you grow the company through adding new employees and expanding the skillsets present in your company while also diversifying and improving your products, leading to higher profitability through innovation.
Pay Attention to Your Data:
Data is everything. Most things in companies can be quantified, which means you have a goldmine at your fingertips if you’re just willing to put forth the effort to gather data and examine it. Look at everything from production rates to customer satisfaction to website conversion rates. Next, start testing. Examine each metric individually and search for ways to improve the system. What can you add? What can you subtract?
Brian Eisenberg, a man with an outstanding reputation in website conversion rate improvement, states that you should “Always Be Testing!” By doing so, you can seek out ways to make incremental improvements. Maybe one test improves productivity by .05%, and another by .1%, and another by .3%. It doesn’t sound like much, but those incremental gains eventually turn into whole percentage points. Plus, sometimes a minor change (such as altering the buy button on your website) may lead to a significant increase in sales.
In short:
- Figure out the areas in which you can gather data.
- Examine it, searching for opportunities to improve (start with the simplest areas).
- Test new methods, designs, landing pages, etc..
- If the new method produces an increase in your metric, keep it – and then try a new variation on the improved method.
If performed properly, testing should prove a relatively cost effective method to grow and increase profitability.
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