One of the core activities that business owners must do regularly is the ancient art of knowing how to maximize profits and reduce business expenses.
The higher your business expenses, the lower your profit margin – lower business expenses will also generate increased profits in theory. Of course, an increase in profits often leads to business growth and expansion; hence, profit can be regarded as the lifeblood of business.
Interestingly, you don’t have to go all ballistic with a total overhaul of your business expenses in order to reduce business costs. This piece provides insight into four tips to reduce business expenses.
Be Strategic About Cutting Production Costs
The most obvious expenses that business owners will need to cut in order to increase margins are production costs.
To cut production expenses, start by working out better deals with suppliers – you can pay earlier for a discount or pay much later in order to ease the stress on your cash flow.
If you use raw materials in production, you may also want to buy in bulk or find new supply chains. You may also want to find efficient ways to track and manage your inventory in order to avoid tying down money unnecessarily as raw materials or finished products.
Get Inspired by Other Business Owners
An objective and critical look at your financial statements can reveal a number of unique opportunities to reduce business expenses and save money.
However, you’ll find other strategic ways make your business expenses more manageable by connecting with other business owners. For instance, you may want to consider combining funds with other businesses in your industry to make bulk orders for supplies.
Apart from showing you strategic ways to reduce costs, you can find inspiration from other business owners on how to open up the innovative flow in your business. When you innovate your business operations, you’ll find it much easier to increase your revenue and you’ll be less desperate to find ways to reduce costs.
Embrace Virtual Technologies and Automation
You can reduce business expenses by adopting virtual technologies in order to reduce overhead expenses. For instance turning your office into a virtual office that facilitates virtual meetings, VOIP, and teleconferencing can reduce travel expenses.
Incorporating tools such as Slack, DropBox, Creately and Google Drive into your collaborative efforts can reduce your operational expenses.
You can also reduce business inefficiency by automating some parts of your business processes. It doesn’t make much economic sense to have a full-time employee whose job is to process credit cards when you can integrate solutions such as QuickBooks into your merchant account.
Deal with Business Debts ASAP
Debts are one of the most sinister but mostly-ignored expense that can drain business finance. Business debts eat into your profit margins in the form of interest payments that you make on the loans. The unfortunate part is that you are under obligation to continue paying interest on your outstanding loan.
Hence, the longer you have business loans, the more interest payments you make, and your profit margins will be reduced. Hence, you may want to consider getting rid of business debts as quick as possible. When outright debt repayment is not possible, you may want to consider negotiating better terms on interest rates and the duration of the loans.
What Neat Tricks Do You Use to Reduce Business Expenses?
As a business owner, do you use any tricks to keep your business expenses to a minimum? Do share them with us in the comment section below.
It’s no easy task to strategically develop a startup business, and if you want to make it big, you’re going to have to get creative about it. Using art and creativity to boost your startup growth can be the best investment you can make as long as you know how to go about it.
Remember that Art Is a Form of Communication
When you’re just starting out, you’re probably going to want to consider creating a logo and a few visual elements that will become the face of your brand. Many companies see these visual elements more as accessories. They are something all businesses must have, yet few really understand how important they are.
Art is about communicating ideas in a simple, powerful way. Every visual element you use, be it the color scheme of your website or the font to write your content, are going to send a message to your audience, whether you are aware of it or not.
Since you already have to choose these elements when you’re setting up your startup, why not take some time to make them actually reflect the principles and voice of your brand? A haphazard jumble of tones, styles, colors and images is going to make your brand look completely incoherent. A powerful visual style can communicate more about your brand than words can.
Create A Strong but Flexible Brand Image
Smart design appears to be timeless. Just think of the Coca-Cola logo or the Nike swish. These are artistic creations that even though they have a commercial purpose, transmit just as much about their subject as any famous painting.
The key to success for design such as this is that the creators (and more importantly, the clients) settled on a simple look that could easily adapt to new contexts. Instead of trying to tell it all in just one element, these pieces leave room for interpretation and variation.
Creativity is more than just coming up with an idea. Creativity, even in art, is about coming up with visual solutions to problems that might not even exist yet. You don’t have to invest a lot in creating the visual component of your brand, though. You just have to be smart about it.
Create Animated Ads to Promote Your Business
It’s a well-known fact that internet users nowadays prefer to skim through content, rather than carefully reading everything they encounter. Given the vast number of content sharing platforms and the dizzying number of content creators, it makes sense.
So, if you want to grab your audience’s attention fast and keep them there for a while, consider investing in animated ads to promote your business. While it’s true you probably won’t be able to fit a lot of information in a short ad, you have a much better chance at raising brand awareness quickly and efficiently.
Animation is the popular format for these types of ads since they are relatively simple to make compared to live-action ads. They offer a much wider range of visual styles and options, and they’re easier to adapt to any brand image.
Replace Lengthy Articles with Powerful Visuals
Diagrams and compelling infographics are a wonderful replacement for written articles, especially if your startup operates in a relatively restrained niche field that customers might not be familiar with.
Visuals can provide a clear image of what your startup does or what it’s planning to do without the need for complicated terms and concepts. Plus, often times visuals are much better suited at explaining proportions and projections.
But these visual solutions can be just the creative edge you need to put your brand ahead of its competition. You shouldn’t restrict your use of images just to necessity. They can be much more efficient and less time consuming than blog posts. Plus, they can further contribute to making your startup brand truly one of a kind and instantly recognizable.
Use Adversity to Your Advantage
Developing startups are faced with a lot of challenges. From budgetary constraints to lack of exposure, there are a lot of things that can slow down your growth rate. What’s more, these things tend to depend on each other.
Content marketing requires a lot of funds for proper reach and output, but in order to obtain the necessary funds, you need a strong client base. And these customers cannot be reached without a proper marketing campaign.
Turning your blog posts from mere informative articles into creative artistic pieces that encompass different media will help you get more with less. Instead of focusing on the quantity of your content, focus instead on the quality. And most importantly, on the message you want to send to your audience.
Use time and budget constraints to figure out innovative ways of using the skills and resources you already have.
Of course, though there are principles to it, how you decide to use art and creativity to boost startup growth should ultimately follow your own idea of how your brand would feel and look. These tips are meant to be your guidelines. It’s up to you to decide how you use them in practice and share the results.
Cristopher Tuckerman is a graphic designer and web developer, with over five years of experience. He is currently collaborating with Artwork Abode, a creative design service company, where he is involved in various logo design and illustration projects.
Today, businesses rely on technology more than ever. Information technology is essential to achieving business success. However, when technology is not utilized properly, it can actually slow your business growth. Make technology work for you by understanding common tech-related issues that might be hampering your business growth right now:
Information Overload
Technology advancements have opened the door to collecting and publishing more information than ever before. At the same time, the sheer volume of available information often interrupts business activities. Too much information can result in over-planning, paralyzing indecision and loss of focus that can destroy your business.
There has been much talk about information overload in the recent years. Along with excess information comes the issue of having too many choices. In addition, the information that businesses collect is often low-quality and unnecessary. To deal with the issue, organizations should change their culture and employ available solutions to manage the volume of unwanted, questionable or low-quality information.
Big Data Cluelessness
The world is now able to collect and store data from an unprecedented number of sources at a remarkable rate. Also, new types of data have become available including those derived from sensors and the IoT. Big Data aims to analyze available information and present it in ways that add value to businesses.
Many companies have access to relevant data, but they don’t know how to interpret and apply it to real-world activities. They also fail to focus on the quality and the context of the data collected. You can make Big Data work for you by using technology to select and analyze the data streams that have the most relevance to your firm.
Security and Backup Issues
IT security concerns continue to hamper business growth in practically every industry. Despite the development of advanced security tools, the greatest threats still come from employee carelessness including weak passwords and poor habits. Additionally, natural disasters, theft, malware and hacking attacks can cause data loss.
Many companies struggle to find the right balance between security and productivity, and abandon security strategies believing that security slows down their growth. You can deal with security and backup issues by finding a balance between optimal security practices and your need for growth.
Create and publish effective IT policies and schedule regular security training for everyone on your team.
Irregular Maintenance
Cost cutting and growth can cause businesses to fail to properly maintain their equipment. Also, some companies ignore maintenance issues because they don’t have any in-house IT experts. Regardless, the policy of only dealing with equipment when it fails paralyzes businesses, often at critical moments.
A routine maintenance program relies on manufacturer recommendations and established best practices to keep equipment running well. Preventative maintenance proactively addresses potential problems, such as incorrect wiring, before they cause downtime.
When you consider the devastating cost of unpredictable equipment failure, you will understand why successful businesses spend money on regular maintenance.
Insufficient Training and Lack of Technical Support
Despite a substantial IT investment, some companies experience negative productivity gains because workers don’t know how to use the features of business software and equipment. Such issues arise because some business owners and managers fail to understand the connection between employee training and productivity.
Business teams often want technology to automatically improve profitability without understanding the need for employee training and support. Meanwhile IT groups can have trouble implementing appropriate technology because they don’t understand the intricacies of the business.
Address training and support issues by improving communication between your internal units, and providing adequate IT training and support for all your workers.
Upgrades and Integration
Companies hurt themselves when they ignore the natural obsolescence of their IT assets. The desire to maintain business growth while keeping IT expenditures on a predictable cycle often addresses accounting concerns, but it can handicap workers. For example, failure to upgrade your software and equipment so it can interact with client systems might require redundant data entry and equipment.
Avoid choking business growth by planning your upgrades based on strategic integration rather than on budgetary cycles. Investing wisely in IT upgrades and integration can streamline your operation and provide you with substantial returns.
Emerging of Disruptive Technologies
Disruptive technologies tend to unexpectedly change the way people live and work and render entire companies obsolete. Some companies, become so fixed in their ways that they don’t even consider the possibility of disruptive technology merging, so they are completely unable to adapt when radical market changes occur. Other companies prematurely adopt potential emerging technology and find themselves unable to backtrack if consumers reject it.
Have your company stay in touch with technical developments that might affect the way customers live and work. The key here is to find the balance between focusing on the present and looking into the future.
Velocity and The Amount of Change
Technology changes faster than most people can realize. In addition to disruptive technologies, the already-existing and well-known technologies are constantly changing and improving.
Companies fail to grow when they don’t have the agility needed to quickly adapt to change. Technological change can either work for or against your business growth. The cost of adopting new technology can stretch your budget, so you must learn to exercise discretion. You don’t want to blow a good opportunity, but you also don’t want to waste your money on useless upgrades.
Deal with the velocity and amount of change by staying attuned to the needs of your customers and understanding exactly what you wish to accomplish with new technologies.
Asking for Perfect Solutions
Businesses that look at technology as a source for perfect solutions are making a critical mistake. All technology has limitations and nothing guarantees success.
Companies will always depend on technology to compete in the modern marketplace. Still, no technology will perfectly suit a particular business model. Business owners and managers who demand perfection encourage internal conflict that can stifle growth.
Overcome perfectionism in your company by creating and communicating realistic expectations. Good communication between every employee, team and department in your business will help everyone understand the role of technology and create an atmosphere of constant and continuous improvement.
Cost and Business Growth
Companies want to control costs, so they may at times ignore their need for new technology. However, ill-equipped teams cannot efficiently produce goods and services or support their customers. Ultimately, cost-conscious companies that skimp on technology end up losing customers and fail. Don’t let that happen to your business.
The cost of technology affects all businesses, particularly small and mid-sized companies. Their limited budget means that they have a hard time competing against enterprises and large organizations. Still, every business needs to plan to spend money on technology. Make technology a high priority in your organization and cut costs in other areas of your business when money gets tight.
In conclusion, you should never underestimate the power of technology to fuel the growth of your business. Tech-related issues, however, illustrate the fact that technology alone cannot deliver success. Instead, depend on education, solid business practices and good communications to make your IT investment work for you.
If you’ve got a business you need a business plan. It’s so obvious, the statement should be inane. After all, without a business plan, people won’t know where you’re heading or what they can do to get there.
It will be harder to make informed decisions about what fits in with the core of your company concept and what you shouldn’t touch with a 10-foot pole. And there is a much greater likelihood that your company will drift away from what it’s good at and lose its competitive edge.
At the same time, numerous companies don’t have a business plan – largely because they struggle to write one up. Instead, at best they’ll have a couple of dozen drafts floating around which kind of get at what they’re trying to do, but don’t really manage to capture it, while at worst it’s right at the bottom of somebody’s ‘to do’ list, right next to getting the company registered at the chamber of commerce.
If either of those situations describes you, then I’m here to help. Today, let’s talk about how you can write the perfect business plan.
Do your research
You need to know as much as possible about your product, the product of your competitors, the market and your audience. Don’t skip this part. It is absolutely essential that you know what’s going on. This is the foundation of your business plan. And without a foundation you’re building castles in the air.
A poorly researched business plan can be more harmful than not having a business plan at all, as it doesn’t serve to identify your key strengths and the dangers on the road ahead. And that can blind you to both.
What is your plan for?
Over at Entrepreneur they’ve a good definition of the business plan. It, “describes the nature of the business, the sales and marketing strategy and the financial background, and contains a projected profit and loss statement.”
At the same time, that doesn’t have to be how your plan works. There are many variations around this theme. For example, it can serve as a roadmap to steer your business in the right direction. Alternatively, it can serve as a tool to pull in investors.
Before you sit down to write your plan, write down your goals that you’re trying to achieve with your goals. Possibly put them on a sticky note that accompanies the plans as you write them.
Write up a company profile
In this document you summarize the history of your organization, the products and services that you offer, the market segment that makes up your target audience, what resources you’ve got available and what it is about your business that makes it unique.
The great thing about your company profile is that it’s not just for your business plan, it can also serve to inform people about what you’re up to. You can include it in a newsletter, turn it into a blog post, or even put it on your about page. So there you go, you’re killing two birds with one stone (poor birds).
Document everything
This is particularly important if your goal is to attract investors. After all, investors are in the business of making money and that means that they’re not just going to throw money at you because they like the cut of your jib.
Instead, they’re going to want to know everything. And they’re not going to be at all impressed if you don’t already have it ready for them or if you don’t know the answer to their questions.
So, make sure you know your cash flow, your expenses and your industry projections. Write down all the property, products and patents that you own and everything else that can be considered an asset.
The marketing plan
Sure, some businesses get lucky with fans going mad about their product and letting the whole world know. You can’t (and your investor won’t) assume that’s you. So create a marketing plan. The goal here is to explain how you’re going to do such things as
Raise brand awareness
Introduce new products
Enter new territories and new markets
Cross-sell several products together
How you’ll increase market share for a specific product in a specific price range
Find and hook desirable clients
Increase revenue
The plan should include objectives for each of your sections. Here you focus on the ‘why’ as well as the ‘what’ of that point. With that I mean, ‘why is this an objective (and why at this point in time)’ and ‘what are you going to do to achieve it?’
Don’t forget to create a cost projection. After all, marketing costs money and you’ve got to have at least a decent estimate of what it’s going to cost you to achieve your goals.
Don’t just do one version
Different audiences will be interested in different things, have different levels of expertise and different expectations. For example, a banker is going to be interested in a completely different set of values and numbers than a potential partner might be.
For that reason, make sure that you adjust your business plan to the audience you are dealing with. The first step in adjusting your business plan is to figure out what are the most important numbers and ideas for this audience and then make those easily available.
You can do this by re-arranging the document to put those numbers near the top, or by supplying a separate sheet that contains summaries of these points and indicates where the reader might find them in the main document.
Don’t forget the passion
Numbers will back up your idea. They won’t, however, define it. For that reason, make sure that you include why you believe in what you’re doing. Show the people why you care and why you are uniquely capable of doing what you’re outlining in the business plan.
After all, the goal isn’t just to sell yourself, it is also to make certain that they understand that you should be the person to do it. You’ve got to sell the package. And that means showing them that you care.
With all of that together, you’ll have the perfect business plan – one that doesn’t just sell the business, but one that also sells you, so that the investors won’t think ‘what a great idea, I’ll go do that myself’ but rather, ‘what a great idea, I’ve got to do it with them’.
About the author: Rick Riddle is a marketing consultant and an up-and-coming blogger whose articles aim to help people with digital marketing, blogging, entrepreneurship, and career. Feel free to follow Rick on twitter and LinkedIn.
In business, there’s a temptation to grow beyond your niche. Most businesses start out highly focused, and at some point, they want more. They figure the easiest way to get more profit and exposure is to start offering more products and services. This doesn’t always work well. In fact, it can limit your ability to generate profit efficiently.
There’s nothing wrong if this is the approach you want to take, and it’s not to say you won’t be successful. It’s just that you may not be as successful as possible. There’s a danger in being too many things to too many people: you’ll mean nothing to any of them.
Here’s why specialization can really help you.
Generalization vs. Specialization
Again, it’s worth noting that there’s nothing wrong with generalizing. It’s just usually not the road that would generate the most profits. Usually, when you’re good at a whole lot of things, you need a whole lot more business to make it work. Different customers from different niches demanding different services puts a lot of pressure on you, especially if you are a startup.
When you specialize in something, it gives you a real advantage both in marketing and generating profit.
A Generalization Example
Take a local business owner who offers services in furnace repair, lawnmower repair, small engine repair, framing, plumbing and laying flooring.
In an average week he’ll do a little bit of everything.
Pros:
Having more services means there are more things people can call you for.
Doing many different things well means you can handle almost every task with some proficiency.
Some tools that you use for one trade can often be used in another trade.
Cons:
You’ll be good at many things, but never truly great at any one of them.
People looking for any of the services you offer are likely to hire people who are the foremost experts in that field before you.
Your prices will be lower in order to compete with the specialists.
You have to have many tools to do all the jobs you do.
None of the tools will be highly advanced and expensive since you only do a few jobs a week with them and it’s not cost effective.
Advertising is a nightmare. How can you get across everything you do in a limited space?
A Specialization Example
Take a local business owner who only handles furnaces. He’ll repair, install, and service them – but that’s all he does.
In an average week, he’s busy with furnaces.
Pros:
People call him first. He’s the expert.
Much like a brain surgeon, he specializes in this one thing, so he knows more about it than anyone else. That level of expertise is expensive. He makes more per service call than the other guy.
He has very expensive and highly specialized equipment because he only needs to have the equipment required to do this one job.
When people think furnace, they think of this guy. He’s the furnace king in his town.
Advertising is highly focused, targeted to the right demo, and only has one message.
Cons:
He can’t do everything. He’ll never make money at lawnmower repair.
If furnaces become obsolete, so will his business.
Why You Should Specialize
As you can see in the example above, when you specialize, it really allows you to become the expert in something. I know it seems more intuitive to be able to attract as many people as possible, but people gravitate towards those who know what they’re talking about.
When you’re looking for answers to a specific question, the best results in Google are the ones from a niche website. If you’re looking for parenting advice, you will not go to a general forum about everything; you will go to a parenting forum or a website. Those people are most likely to know what they are talking about.
The same is true with your career. People seek out the advice of experts first. It’s why so many companies have blogs now. It’s part of a content strategy for producing amazing content that positions them as the experts in their field.
Here’s how specializing will benefit you:
Focus. You only need to focus on dominating one area. It’s much easier to focus on targeting a parenting website than targeting everyone. You can put all your energy into one thing and be amazing at it.
Money. You can get paid more by being the expert in one area. Customers tend to pay a jack-of-all-trades an average rate for an average job, but they are ready to pay a higher sum of money for the expert in the field, because they trust him to get the job done without failure. Specialists in all fields make more money.
Efficiency. If you’re constantly doing the same type of thing, you’ll invest in the specialized training and tools that will help you be most efficient at it. You’ll also be able to solve problems quicker than generalists as you see them more often.
Demand. Most people want the best mechanic, best website builder, best adwords guy, the best writer. If you can get the results they’re looking for the first time, people will pay more for that. Your services will always be in demand.
Specialization doesn’t limit your business, it helps it become more efficient and gain more profit. Where the generalist will show up in the middle to bottom of all packs, you’ll show up near the top of yours. People will come to you first.
Growth will happen from reputation, advertising and the service you deliver. All of this is much easier when you specialize instead of generalize.
The most common thing that people do when they need to develop a startup growth strategy for their company is to do a Google search for how other well-known companies in their sector were able to obtain hundreds, thousands, or even millions of users.
For example, if you are in the tourism industry, specifically in the lodging sector, you might think the ideal thing to do would be to analyze and later copy how Airbnb became the giant that it is today.
For the most part, they did this by using the strategy of offering their non-traditional lodging services, specifically during mass events such as the 2008 Democratic National Convention in Denver, which saturated the number of rooms that the hotels in the city could offer. In this way, Airbnb was the ideal solution for some visitors.
However, the tactics they used in order to grow their company are surely not compatible with your business venture for several reasons: the current context is not the same, the service your company offers is not exactly the same, or their strategy was already consolidated, leaving no room for competitors to enter at a reasonable price (this is what happened with Google AdWords, which was at a time an excellent strategy for growth for a large number of companies until it became no longer profitable).
No matter how much it may be justified, the goal is to not copy the tactics of others (that is, the specifics of what the company did in order to achieve their growth).
Conversely, what you should do is to learn to better understand how they achieved success in order to design your own startup growth strategy that will allow you to increase your number of clients.
Is your startup ready for growth?
It is important that you never skip over this question or take it for granted. In order to grow your business, first you should achieve Product/Market Fit, if not, you are not ready for growth, and you could be sealing a doomed fate for your project.
But how do you know if you have achieved Product/Market Fit? There are 3 ways that you can find this out on your own:
1) If you already have users, no matter how few, if your product disappeared for some reason, would they really be highly upset with you?
2) Additionally, have your current clients for your platform been obtained by organic growth (by word of mouth)?
3) Of the new users who find and use your service, you will see that the great majority of them (around 70%) will stop using it within the first few days/weeks. This is generally normal and should not cause you much worry as long as the other 30% use your service over several months to years of time. It is then that you can assume that you are on the right track.
Be careful, once you observe this in your company, you should sit down and crunch the numbers. That is, you need to answer the following question: Is it economically viable to invest, for example in online ads, in order to bring on 10 new users out of which only 3 will continue using and paying for your service over the long run? More specifically, if it costs you 10 Dollars to bring 10 new users, can you recuperate the 10 Dollars with the 3 clients who will continue using your service?
If you can answer yes to the 3 points mentioned above, you can be assured that you have obtained Product/Market Fit.
I will be clear again: don’t consider growing your company if you have not achieved Product/Market Fit. Just look at what happened to Homejoy, which raised 38 million Dollars to invest in growth, when in reality they had not even achieved Product/Market Fit yet.
A recommendation: Seeking Product/Market Fit can take months or even years, but I assure you that it is the first and most important step that you should do as the founder of your business venture.
In our company, it took us 1 year and 7 months, but it was the best investment that we could have made. This first phase is not “a race to see who can get there first,” it is more like a marathon in which the person who wins is the one who keeps running (insisting and trying) without giving up and sooner or later reaches the goal.
The question at hand: What is the road to take for planning your own startup growth strategy?
In order to design your own startup growth strategy, I invite you to respond to each of the following questions, implementing them one at a time in your company, all the while learning, modifying, and implementing them again (there is constant interaction in order to obtain continually better results), it is a process, not just a one-time action.
1) How can the first users be obtained?
a)Word of mouth: Paul Graham, founder of YCombinator, teaches us “Make something people want,” stating that the key for every business lies in creating a product that people really enjoy and most of all: that they need. In this way word of mouth will be your only ally in the first days and weeks, even months, for your new project on developing a startup growth strategy.
There is nothing that a budget, economic resources, or even an infinite number of articles in the press about your company can do to position your product, if you do not have something that your first users want to share with others. We don’t have to go far for an example of this: Google historically invested $0 in marketing.
While Microsoft, on the other hand, tried to boost Bing by investing $11 Billion, yes you read that correctly, 11,000,000,000 Dollars, and failed. Organic growth produced by word of mouth is definitely your starting point.
b)Paid Advertising: Another method is to invest in Google AdWords (to find people who need exactly what your product provides a solution for), Facebook Ads (with a specific public in mind with a general interest that fits within your segmentation; for example 20 to 25-year-old people living in Seattle, or male university students, etc.), affiliated networks, etc.
This is a good option as long as it is a minimal investment and controlled in the beginning. The goal here is to study the behavior of your first users and learn from them in order to go on improving your startup growth strategy.
In order to increase your paid advertising, you should first determine your LTV (also known as CLV). In other words, how much your company earns for each new client obtained.
From the LTV you will be able to increase your investment in paid advertising, provided that the cost is less than the return on the investment, which is why it is highly important for you to know this value first.
A suggested amount of time that it should take to calculate the LTV for your new startup is 3 to 4 months maximum; if your company already has some history, around 6 to 8 months; and if it is well established, 12 months.
c) SEO: This strategy could be the best one for your company, especially if you are taking everything on with your own resources (bootstrapped) as it requires not an investment in capital, but in your time and energy.
Perhaps this is the biggest disadvantage, it does take time, it doesn’t get done from one day to the next, and it may take months before you see results.
A good strategy may be to invest small sums into paid advertising in order to obtain your first users in the short term while you continue working on SEO, which can give you results over the mid and long term.
To learn SEO, I recommend watching the Whiteboard Friday tutorials by MOZ which are very useful.
2) How can these users be converted into clients?
Once you have attracted new users to your web site using the points mentioned above, it is time to convert them into clients.
a) Design your Landing Page: The first thing that you should do is to develop a landing page that is optimized, so that the following question is answered instantly, in a clear and simple way: What is the advantage I will gain if I use this service?
We should answer this question by giving an irresistible offer of value to the user. An example of this is Shopify, where in just one platform you will find absolutely everything you need to launch your own online store that same day.
Or Treehouse, which has online educational software with which people can change their career path immediately by learning to program online.
b) Optimize your conversion tunnel: Once the user is curious about your offer thanks to your landing page, it is then time to activate their account. This process should be analyzed and be updated with each passing day, from the form where the users enter their personal data to where you ask for their credit card information (where necessary).
Here, the focus is on providing simplicity, the less steps the user has to make, the better. This activation process is not just about getting the user’s information; it is also about explaining how to use your service for the first time.
Never leave the user on their own to figure out for themselves how your software works. One, who I feel does this extremely well is Canva. In 23 seconds, they take you step by step through the onboarding process to being able to do your own design. It is your responsibility to educate the user how to use your product.
When you ask the user to fill out some field in your activation form, tell them why. If they have to input their credit card information, tell them exactly why, what amount they will be charged, if they can cancel at any time they wish, what security measures are in place for storing their information, and any information which may help to remove any barriers of doubt in the mind of the user in order to close the sale.
Also be sure to show the client where they are at in the onboarding process, so that they will know what step they are on and how many are left until they are done.
For example, Progressive has 5 steps in order to request your auto insurance. As can be seen in the following image, the first step is to provide the initial data such as your name and address, then the vehicle information, after that the driver’s, and so on.
All along the way, your users must know exactly where they are in the process and how much further until they reach the desired end.
Tips:
Run as many A/B testings as you can. To do this, you must take measurements before and after every modification in order to see if the change should be kept or not.
Begin with the simplest improvements (which take you the least time and which provide the quickest improvements for the user), not with the most complex. Eventually, when you have solved all of the simpler problems, you will only have the more complicated and time-consuming ones left to do. For example, if your page loads slowly, simply change the server, which will take you just one hour, and just like that, problem solved in an easy way yet having very positive repercussions. If your client has trouble logging into your system, create an easier process such as using the authentication provided by Facebook.
3) How can the clients be retained and be made into recurring customers?
You should understand that retaining your clients is a huge part of your startup growth strategy and is the key to gaining success for your business venture over the long run. In broad terms, retention is a synonym to notifications.
A notification is an email, text message, or a push to a cell phone which you send to notify them of something new in your service, an improvement, an offer, etc.
Facebook is one who used this and continues to use notifications with huge success; from sending you emails about any updates on your profile to real-time cell phone notifications for you to login again and maximize the use of the service on a minute-by-minute basis.
Unfortunately, not all of us are Facebook, and being such, I recommend that you first do manual trials and not automatic ones. Start out little by little, as first you must assure yourself that what you are sending to your client (for example, an email) has good rates of being opened in order to avoid being penalized by your IP.
While it is important for your client to continue to use your service as frequently as possible, you should learn exactly what interests your clients and what is of maximal use/value to them in each notification that you send, because if not, they will stop reading them and will even mark you as spam.
For example, Stripe sends me notifications of the earnings for each day, which makes me use their application on a daily basis to see the latest transactions, which is definitely an efficient way to retain me constantly as a client.
4) How can more clients be obtained?
If you have clients that love and use your service frequently, what can you do to help, facilitate, and strengthen the growth which comes from word of mouth?
For this you can work in a referral system. I believe the famous example of Dropbox makes this point clearly. They give you, as well as the person you invited to use their software, extra storage space in the cloud.
Even though each startup is a different world of its own, try to find a referral strategy that can be adapted to your specific services. This is a method for growth, which if implemented correctly, can take you to the success you dreamed of and the needed separation between you and your competition.
Another example, which is older yet equally successful, is that of PayPal, which literally gave you money for each person that you brought to their system:
And lastly, a very current example is UBER, where with each friend that uses their service thanks to your introduction, both you and them are given credit that can be used to travel.
Conclusion:
The challenge of finding new clients to help your startup grow is the most important thing you should focus on as the founder. Once you have achieved Product/Market Fit, this should always remain as your number one priority.
If you cannot implement the right startup growth strategy for exponential growth, your competition will. The key is in trial, error, repetition, and being creative in the search for new ways to grow. You must have perseverance and consistency until you have finally reached the desired results.
Redactor: Director of Marketing for EMT Cristian Rennella. Professor at the Universidad Nacional Argentina. Specialist in the development of educational programs in technology for Latin American countries.
b) Optimize your conversion tunnel: Once the user is curious about your offer thanks to your landing page, it is then time to activate their account. This process should be analyzed and be updated with each passing day, from the form where the users enter their personal data to where you ask for their credit card information (where necessary).
