Revenue Journal®

You want to grow your revenue - you need to grow your revenue - but the big question is: How?

Do you take what you've already done and try to do the same thing in another location? Do you partner with others who are doing something related to what you're doing? Do you offer more products and services - to current customers, or new customers? Do you continue doing what you do now, but expand your distribution channel - selling through more portals, distributors, resellers? Do you make it easier for people to buy from you, on your current website? Do you increase your marketing spend? If so, which marketing vehicles should you invest in? Do you hire more salespeople?

The real answer is not what to do, but how you go about figuring out what you should do.

There are dozens of ways to grow a business. However, most people decide using the "gut" method. An opportunity presents itself, or something strikes their fancy. They don't think it through. As they get further into it, they realize that it's more complex than they thought, or the assumptions they made turn out to be false.

Let's say Bill runs a small business in the US. At an industry conference, he meets Alfred, who runs a similar business in another country. Bill has been thinking of opening an office there. As Bill talks to Alfred, it becomes apparent that Alfred would be open to some kind of partnership. They start working on a deal. After several months and a lot of lawyer time, Bill agrees to buy Alfred's company and Alfred agrees to stay on and run it.

As the months go by, Bill is excited about the new partnership. He spends a lot of money marketing his products and services in the area, and is encouraged by the growing sales. But after about a year, his enthusiasm has started to wane. Sales have stalled, no matter how much money Bill puts into marketing. Alfred is not as ambitious as Bill needs him to be. Bill realizes that Alfred was open to having his company purchased because he was already failing - and he brought his failure-prone behaviors with him to the partnership.

Finally, Bill hears through the grapevine that Alfred is not being truthful about all of his activities, and is even doing things that could hurt Bill's business. Bill now has to dissolve the partnership - always a messy, expensive, and emotionally draining undertaking.

That's just one example of a "hot growth idea gone wrong." I could give you countless others - involving portals, distributors and reps, product line extensions, increased marketing expenditures, and on and on. There are hundreds of ways to lose money trying to grow your business.

Fortunately, there is a right way to do it, which is what I'm going to focus on here. There's a series of steps you can take, which lead to actual revenue growth rather than loss.

1) Know your real weaknesses. It doesn't matter how small or large your company is. Every company has its own inherent strengths and weaknesses. Companies are like individuals. They can be depended upon to do particular things in a given situation. "Comes up with great ideas, but doesn't follow through" could be said of an individual - or of a company.

All company owners and managers, especially those who "follow their gut," tend to ignore or dismiss their weaknesses. An entrepreneur may have a weakness when it comes to communicating with his staff and partners. A larger company may tend to promote non-action-oriented people into management, leading to missed opportunities and frustration among the employees, partners, and customers who are trying to get something done. Another company may be great at getting the word out about their products, but their product support is woefully inadequate.

If these weaknesses are not acknowledged and repaired, they will infect the new endeavor, handicapping its formation and spoiling its ultimate success.

You may think you know what your weaknesses are, but my experience has proven to me, over and over, that we are always wrong in these self-assessments. Even if we know we have a weakness, we have spent years telling ourselves that it's not that important. We have brushed away any comments or warnings others have given us about those weaknesses. In the larger companies, employees come to realize that "no one is going to do anything" about certain weaknesses, and they learn to live with them.

If you want to avoid this all-too-common fate, you need to find out what your real weaknesses are - the ones that are currently keeping your company from being all it can be, and will hobble anything you do to grow.

The best way to find out what your weaknesses are is to have a trusted outsider interview your employees, partners, and customers. This person should be someone who understands your business, who can hold an intelligent conversation with the people interviewed, and who can be trusted to disassociate the comments made from the people who made them. It is not important "who said what." What's important is what they are saying. And, ALL of them will be able to identify and describe your company's weaknesses.

I also know from experience that what they say won't be what you were thinking. You will be surprised. That old bad habit of yours, which you always thought was unimportant (or endearing), is glaringly obvious to employees, customers, and partners, and it drives them nuts. Some of them have already left or are thinking of leaving - because of that one bad habit.

If you know what the weakness is, you can start fixing it, by approaching it as you would any other business problem. Analyze it. Diagram it. Figure out what you can do to fix it, then do it.

After you've done this, everyone will notice and the word will get out. Your revenue will grow - even without you doing anything "different" or "new." Customers and partners who were wavering will come back. Dispirited employees will be encouraged.

2) Know your real strengths. Most of us think we know what our strengths are, but, as with our weaknesses, we are usually mistaken. There are things we take for granted in ourselves and our companies that are quite attractive to our customers, partners, and employees. We may even see those strengths as weaknesses! For example, a CEO might have a "big heart," causing people to be loyal to him for years - in spite of his own disdain for his "emotional weakness" and his transparent attempts to "be tough."

The smartest companies understand their essential strength, and use it to grow revenues. Southwest Airlines comes to mind. Their biggest strength is their "love" theme. It started with "Herb," and it continues to this day with new managers and employees. In spite of their success and growth, they know what their core strength is, and they have remained true to it.

You may take your own strengths for granted - such as your ability to create new systems or processes - because it comes naturally to you. You don't think it's any big deal. But it may be the one thing that attracts and retains your employees, partners, and customers.

Don't assume you know what your strengths are. Let the interviews identify what your true strength is - in the real world (the one that everyone else lives in).

3) Ask your customers, employees, and partners what they think you should do. While that trusted advisor is interviewing your customers, he or she can ask, "If you were the CEO of [this company], and you wanted to grow your business, what would you do?"

People who associate with your company think about your company. They have ideas. They see opportunities. They see which things you could do well, given your strengths and weaknesses, and which things you would do poorly.

I am always impressed by the analysis and ideas that employees, customers, and partners come up with during these interviews. Their answers are always specific and insightful. Their answers almost always take strengths and weaknesses into account. What they recommend will be logical. Wise, even.

4) Analyze your input. Once you know what your strengths and weaknesses are, and you have gathered some great ideas, it's time to analyze them. Build diagrams and charts showing the pros and cons of various approaches. Run the numbers - realistically. As objectively as you can, weigh the opportunities, the costs, and the risks of each approach. Include "ease of implementation," "time to payoff," and "how it could negatively affect other areas of our business" in your assessment. Obviously, this kind of analysis will require an offsite meeting with your core leadership group. Because you will be building on real market input, rather than your own assumptions, you will be able to make revenue-enriching decisions.

Frankly, if the interviewing and analysis parts are done right, your course will be almost blindingly obvious. Instead of having one of those meetings where everyone is arguing and stressed out, everyone will be thinking, "Yes, this is exactly what we should do. It's going to work." They will be able to support the next steps, and they won't find themselves facing unpleasant surprises and disappointments later - because you hadn't listened to the market before you made your moves.

5) Build on your strengths. If the interviews and analysis have been done correctly, you will be able to pursue growth opportunities that make the best use of your strengths. You will understand and build on that essential ingredient that distinguishes you from all others in your industry, the core quality that you will be able to apply to other markets, locations, and business types. Everyone will be able to agree on the next steps to follow, partly because you are already strong in this area - you already know what to do. You're just applying what you know how to do to a new area.

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When it comes to growing your business, the main message is that it PAYS to LISTEN. You can't trust your gut; it's corrupted by your own mixed character traits and subjectivity - which is driven by your emotional needs. Once you've listened, and analyzed what you've heard, all those mind-numbing questions about growth will be answered. And you will avoid painful and unprofitable mistakes.