I’m a simple guy.
I like lifting heavy weights, Japanese anime, and strategic business growth.
And as much as I like to talk about weightlifting, today, I want to talk about how to grow your business.
I’m always looking for different ways to get the biggest result with the least amount of work.
It’s not just me; just look at this quote from Bill Gates:
“I will always choose a lazy person to do a difficult job because a lazy person will find an easy way to do it.” – Bill Gates
Look, business is pretty simple stuff. However, I didn’t say it was easy. It still requires a lot of very hard work. So, why not give yourself every possible advantage over your competition?
I’m going to share some numbers and strategies with you that’s going to make it crystal clear how to grow your business 10%, 20%, and even 30%.
We’ll start with the concept of “deconstruction.”
So, what does deconstruction actually mean?
Let’s see what the good ol’ Cambridge Dictionary tells us:
DECONSTRUCTION: “The act of breaking something down into its separate parts to understand its meaning, especially when this is different from how it was previously understood.”
So how are you supposed to use this concept to grow your business?
Try to see if you can guess the answer to the following question before you go on:
In how many ways can you grow your business?
Five different ways?
Here’s the kicker: All those guesses are wrong.
In fact, there are ONLY 3 ways to grow any business in any niche – which is the essence of deconstruction. You break down “how to grow a business” into the smallest, individual pieces to create the biggest possible change.
Here’s a simple formula – developed and pioneered by the great and esteemed, Jay Abraham – to show you how to use deconstruction to grow your business by over 30%:
# OF CLIENTS x AVERAGE ORDER VALUE (AOV) x # OF ORDERS/YEAR
I not a big fan of math, but this is VERY interesting!
To illustrate this, let’s use a simple example to make things crystal clear:
Let’s imagine you have 1,000 clients who buy from you two times per year, with an Average Order Value (AOV) of $100:
1,000 clients X $100 AOV X 2 orders /year = $200,000
In this case, you’ve got a nice and simple $200,000 /year business.
But what if you wanted to grow that business by 10%?
How could you do this easily and effectively within the next 12 months?
- You could increase your AOV by 10% – which is only $10 more per individual sale
- You could increase the number of clients by 10%, which would give you 100 extra clients per year
- Finally, you could increase the purchase frequency (or improve your retention) by 10% – meaning that all your clients only needed to buy 0,2 more times PER year
All great options and not that complicated.
For this example, let’s say you focused all your attention on growing your client base by 10%, and you keep *everything* else the same.
In this case, here’s the math:
1,100 X $100 X 2 = $220,000 (10% growth)
Let take it a step further.
What if you wanted to grow your business by 30%?
Again, remember the formula:
# OF CLIENTS X AVERAGE ORDER VALUE (AOV) X # OF ORDERS/YEAR
So, what can you do if you wanted to grow your business by 30%?
Here are some very actionable and strategic examples you can use in your own business:
- Increase AOV by 10% by creating strategic upsells in your funnel – again, in this case, we’re talking about $10 more per sale on average
- Grow your client base by 10% by implementing a strategic, and ongoing referral system
- Increase the purchase frequency by 10% by communicating with your clients more frequently for example through email (which is, in my humble but very accurate opinion, the best way to do this)
Let’s look at the math:
1,100 X $110 X 2,2 = $266,200
Wow! This is incredible.
Just by doing these small changes, you’ve now grown your business by MORE than 30%!
You’ve now grown your business by 33,1%.
This is the power of exponential growth!
And if you feel those numbers are too small and unambitious, just add a zero.
The beauty of this concept is that nothing in the formula changes even if the size of the business changes.
Here’s the bottom line:
Instead of stressing about which new social media channel to use, or which new gadget you should invest in, focus on these three areas of your business.
Think about it… if all you did, for the next 12 months, was to focus strategically on how you could increase your AOV by offering your clients more value, do you think you could grow your business by just 10%?
Or, if all you did was to focus on how you could increase how often your clients bought from you… could you increase your purchase frequency by just 10%?
Or, if all you did was to focus on getting just 10% more clients this year… could you do that?
Your biggest growth is ahead of you.
And now you have a very simple, strategic method to take your business to the next level.