When you start a business, your “big idea” may not immediately bring in as much revenue as you desire. However, the end goal of every entrepreneur is to watch your new company grow — and that takes time.
Recently, I advised a friend who felt hopelessly stuck in the process of growing his small business. As we talked over coffee, I asked him a few simple questions to help him gain more clarity about his business despite its slow take-off. Afterwards he shared with me that he walked away from our conversation with newfound focus and confidence. He now knew how to grow his small business faster.
If you find yourself in a similar scenario, here are the three questions that every entrepreneur should ask themselves to jump-start business growth:
1. What is already yielding results in your business?
The one thing your small business needs, more than anything else, is momentum. Momentum is critical for keeping your energy and spirits high as you deal with the inevitable ups and downs of building a startup.
The key to gaining momentum in business is to work smarter and identify what is already working, and then do more of that activity. Use the Pareto Principle to your advantage. This principle (also known as the 80/20 rule) states that roughly 80 percent of all effects come from only 20 percent of causes.
For example, if you look closely at your business, you will likely find that 20 percent of your marketing activities are resulting in 80 percent of your revenues. Look closer and you may find that (an estimated) 20 percent of your customers account for 80 percent of your sales.
In my friend’s case, partnerships were the biggest success factor in his company’s success. In a relatively short period of time, he had attracted some very powerful partners who were capable of delivering thousands of customers to his business. Because partnerships were already working, the conclusion was to focus more energy on cultivating relationships with existing partners, while bringing new partners on board.
2. What’s not working in your business?
Next, identify what is not producing results. Look for problem areas within your business that have caused one too many sleepless nights. Then, instead of trying to fix what is broken, stop investing your energy in that area.
This advice cuts against the grain of conventional entrepreneurial wisdom. As an entrepreneur, you have probably been told that perseverance is the key to success. While that is true, you may not have enough time or resources for unlimited spins of the wheel.
Instead, put whatever is not working on hold and focus your resources on areas that yield favorable results.
For example, my friend had been focusing all of his time and energy on search engine optimization (SEO), even though it did not immediately generate short-term revenue for his business. For that reason, I advised him to pause his focus on SEO and invest the majority of his resources into partnerships that had the potential to drive immediate revenue.