Profitable Top Line Growth

Andy Birol, Birol Growth Consulting

Companies Either Grow Or They Are Sold

While financial gamers, schemes and scams have enabled many companies to avoid either profitable growth or a sale for years…

… ultimately one of these options is inevitable.

  • A company that is profitably growing is controlled by passionately committed owners and investors.
    Their firm is financially and operationally self-sufficient. There is no need to merge or look for investors.  Its leaders can reduce its credit line and pay down outstanding loans. The company has customers who are happy to pay for its valuable products or services. Over time, the company will build up retained earnings and become a creator of wealth. As long as its owners are confident and passionate they should never think of giving up their independence in running it or cashing out. Life is good!
Your company either profitably grows or is sold say Andy Birol.

Your company either profitably grows or is sold says small business growth consultant Andy Birol.

  • A company that is not growing profitably has flat or declining sales.
    Its costs and expenses are fixed or rising and it starts to lose money. The company begins to consume more cash than it generates. Owner, banks or investors have to subsidize the company through credit or by tapping any retained earnings. These leaders lose passion for their business as it is no longer self-sufficient. Clearly, its customers cannot or will not pay enough for the firm to delivery its products and services.  First, the company runs out of cash, then out of credit and finally must be sold.

There are only two buyers for a company that is not profitably growing:

  1. New owners and investors with ideas, cash and passion to return the company to profitable growth.
  2. Bankruptcy trustees who sell the company for whatever they can to pay creditors pennies on the dollar.

So companies either profitably grow or they are sold.

What’s it going to be for your company? Do you agree or disagree?

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10 Winning Ways To Win Back Wayward Customers

As George Costanza said in Seinfeld, “It’s not you it’s me!”

Well if it is your fault you lost a customer you really need back, what can you do?

Rather than simply grovel or cut your prices which will kill your margins, here are ten steps you can take.

10 Win Back Tactics by Andy Birol

10 Win Back Tactics by Andy Birol

  1. Provide a warranty if your product was faulty.
    If your product or service was deficient, offer some kind of insurance to assure your customer it won’t be their problem next time.
  2. Find another buyer within your customer if it’s bad blood.
    Often there is someone else in a bigger company who you can start over with, especially if what you offered had a good track record before your relationship turned sour. Go over the buyer’s head if you have nothing to lose.
  3. Sell to another department if they start buying for different reasons.
    Why customers buy your services or products can change over time. A purchasing department can make decisions until their company has legal or customer problems at which time their finance or marketing departments may now have the final say.
  4. For a while, give away your products or services for free if you broke your promise.
    Sometimes a customer just needs to see that you are punishing yourself for your own transgressions. Take one for your team if you screwed up in this way. They may regain their respect for you for doing so.
  5. Change your value into a service if they won’t buy your product (or vice versa.)
    Sometimes buyers are no longer allowed to outsource what they used to buy and must make it themselves. For example, if they cannot pay for your maintenance services, you could sell them the training or the components they need to do their own maintenance.
  6. If you have been serving this customer for a long time, reexamine what it really costs you to do so.
    You can cut your price if it’s become cheaper to serve them. Or you should do so if there are now better alternatives on the market. Yours may just not be worth what they once did.
  7. Change what you sell into an expense if your customer’s CFO won’t approve your product as a capital cost.
    Often, capital spending is prohibited but monthly expenses continue to be budgeted. If this is the case, change what you offer so it can be paid for by a different budget category. For example, if they cannot buy new vacuum cleaners, sell them cleaning contracts.
  8. Sell your wares through a distributor if customers start to need smaller quantities or more service.
    Perhaps your service has declined as you pursued larger customers. If so, get a third party to sell and service your customer properly. You sure don’t need to make as much if you are doing less.
  9. If they won’t buy it by the unit sell it by the hour or the result.
    So many times buyers are told to cut costs by cutting out inventory. So sell them all they need by the hour.  Make sure you can profit by providing them with coverage if they need the result of your product.
  10. If you didn’t ask for permission, you can legitimately beg for forgiveness.
    Sometime, you just have to fall on your sword and admit you should have been more deferent, collaborative or considerate. Unless you made a mistake that was evil and premeditative, humility is a winning virtue!

Having witnessed and made so many mistakes over the years, I have seen all of these ways work wonders to win back a client. And once repaired, a formerly damaged customer relationship is always better than it ever was before the problem occurred. Here’s to your winning ways!

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Why Focus on Your Customers First?

In our post-crisis, unstable economy, we have learned first to survive.

We have cut expenses, chosen needs over wants and take few chances.

What is more important than focusing on your existing customers in a cash-and confidence-starved world? Nothing.

Nothing more important than focusing on your customer says Andy Birol.

Nothing more important than focusing on your customer says Andy Birol.

Your profitable, paying clients are your quickest path to achieving Profitable Top Line Growth. They are already paying you and trust you to deliver.

Would you rather keep your customers or invest risky money to poach prospects from your competitors? The answer is clear, especially if your customers are at-risk being poached in return. Your loyal buyers need your focus because they already respect your value and provide you with cash.But have they changed along with the world in general?

Unless your current customers are going bankrupt, focus on them by learning know if and how they are:

  • Staying profitable?
  • Behaving differently?
  • Pursuing new goals?

Chances are your customers have changed and will not buy just like they did. What new behaviors, needs and wants do they have? Now, who is your new real buyer? How has their approval process changed? What are their new expectations? Even before the economy improves and confidence grows, why would your customers keep buying as they did?

Instead, they are probably looking for new products, services, expertise, conditions and warranties when spending to meet their new goals. Knowing how they have changed is your first step to Profitable Top Line Growth, because if you do, you can change what you sell to profitably keep, grow or win-back your customers.

Refocusing on customers means changing your previous sales, relationships, margins and practices, often by reinvesting and retooling what you have been doing for years, just when cash is tight. Try to see your buyers’ changing behavior as an opportunity to meet their new needs and you will profit with them. But treat your historic relationship as a blueprint for a future you feel entitled to, and you will likely fail.

This blog will regularly bring you tools, techniques, resources and real-world examples on how you can leverage your customers first.

Filed under: Business Growth, Profitable Top Line Growth, , ,

Why Profitable Top Line Growth Now?

Before the financial crisis, most businesses could coast along and rely on their credit lines to make up for shortfalls in sales.

“Good” customers could be subsidized and customers who didn’t pay or went under could be ignored by just borrowing more cash. For the firm, slumping quarterly revenues and rising expenses could be carried forward by financial wizardry and leveraging a balance sheet.

While the lessons of doing business without credit and cutting expenses to the bone have been learned, how can one grow a business back to where it was and forward after the financial crisis? Without fads like buyouts, rollups and ESOPs, an owner, financier or organization should return to the oldest source of creating growth in the book. Sell more products and services and do so at a profit.

Why Profitable Top Line Growth Is Important, by Andy Birol

Why Profitable Top Line Growth Now? by Andy Birol

Profitable sales means focusing on:

  • Higher gross margins from differentiating your value and de-commoditizing your products and services profitably
  • Knowing that every sale you make is profitable by customer, order item or services
  • Managing your balance sheet for liquidity instead of credit where the biggest assets are customers’ predictable purchases.
  • Creating a wealthy company that can be sold for cash and secure the lifestyle of its owners now and later.

Profitable Top Line Growth is not a fad, or just a program to get by in the short term, but a way thinking about your business, investment or organization. It starts with knowing who is paying you for what value and continuously working to repeat this. It is a pay-as-you-go approach to growing your business that reduces dependence on borrowing money, and increases the wealth of a company and the security of its owners and all who rely on it.

Whether your business has major growth or returning to growth in its plans, this blog will focus on the tools, techniques and real-world examples for creating Profitable Top Line Growth!

Filed under: Business Growth, Profitable Top Line Growth, , , ,

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