How could you increase your annual revenues by 75%?
There are three ways to dramatically increase your revenues: capacity, proactivity, and value pricing.
In my 26 years of working with privately-held small and medium businesses in 51 different industries, often the biggest obstacle to revenue growth isn’t marketing, sales, or courage. It’s capacity.
How could you double capacity in your business?
A manufacturing company that I worked with outsourced a complex part of their manufacturing process to a much larger, more sophisticated manufacturing company who had all the fancy equipment and processes that turned this time-consuming process into an easy one. They doubled their revenues because they could produce more and sell more.
A service company grew from $20 million to almost $35 million, or 75% in one year, by ramping up capacity, formalizing systems, hiring more people, and most importantly, focusing on training and quality. We developed the infrastructure and increased capacity in management, working capital and information systems to support growth.
What’s your P/R ratio? This is the ratio of your proactive time vs. reactive time spent running your business. Are your sales people reacting to inbound phone calls and emails? Or, are they strategically visiting your best customers and proactively offering high value products and services that help to increase your customers’ results?
Another opportunity to be proactive is to follow up on old and open quotes. I once sat in a sales manager’s office and we added up the drawer full of old quotes. They exceeded last year’s sales! How much gold is sitting in your old quotes drawer?
Many businesses set their fees by the hour, or whatever their industry dictates. However, if you establish the value of your work based on the economic value and results you create for your customers, you can charge more. That’s the essence of strategy: to understand your economic impact on others.
If you know that you save your customers money by increasing their uptime or operating efficiency, and you can back that up with solid numbers, then you will have a business case for charging more, since you’re worth more. We all know we get what we pay for. Are you charging what you’re worth? Do you know what you’re worth?
EMW Industrial Ltd. – A Saskatchewan Success Story
Ewen and his wife Shirley Morrison founded EMW a few decades ago to repair grain elevators. In fact, EMW stands for Ewen Morrison Welding. From humble beginnings, EMW is a safety-award-winning company that has grown to over 350 employees located across western Canada and a subsidiary in the United States. They just opened a new head office in Saltcoats, SK.
The company focuses on reliability-based maintenance for the agriculture, mining, and material handling industries. EMW has grown based on their values, according to Ewen, “We take care of our employees and they take care of our customers. Our core value is safety and we strive to make sure everyone gets home safely at night to their families.”
When you take care of your employees and your customers, increase your capacity, proactively promote your value, and price according to your value, you will rev up your revenues. Full speed ahead!
Phil Symchych MBA, CPA, ICD.D, is the president of Symco & Co. Management Consultants and provides growth advisory and governance services to high growth companies. He can be reached at 306-992-6177 or by email at email@example.com.