Whether you’re a small business on track to reaching the £1 million revenue milestone, or you’re already there and are wondering what’s next, make sure you see this achievement as an opportunity, rather than an end in itself.
It can be extremely tempting to take the £1 million mark as your cue to kick back, relax and let your business run itself, but don’t fall into that trap. Your business must be prepared to embrace change.
Perhaps the most significant change of all is that you’re going to have to work a lot harder. A daunting prospect, maybe, but you would not have come this far if you were scared of hard work. Once you’re finished giving yourself a well-earned pat on the back, these tips will help you avoid the dreaded growing pains and keep you on track to reaching that next significant milestone.
When you hit £1 million in revenue, people out there clearly want your product. You’re providing something of value to your customer, and now is an excellent time to work out precisely what you need to charge to keep meeting high expectations as you invest in the growth of your business. But don’t just put your prices up—think outside the box and adjust your pricing structure by rewarding repeat purchases or encouraging membership to an elite customer group.
Test out your new pricing structure to evaluate your customer response, and if necessary, go back to the drawing board. Fine-tuning your pricing can be risky and laborious, but you won’t regret it once you start to see your revenue begin to increase.
Brand recognition and public trust in your brand are what is going to take your business to the next level. Three key areas to nail if you want to build and strengthen your brand are Product, Marketing, and Customer Service.
In the initial phase, your focus may have been on growth, but now is the time to make sure your product is the best it can be. If you’re still doing your marketing in-house, you might want to look into hiring a marketing expert who understands your vision. This will allow you to capitalise on your recent success and make sure the brand fits with the global company you want to be, not the small business you have been up until now. Finally, do not ignore word of mouth. A crack customer service team is the way to ensure that your existing customers recommend your product to others.
One of the key ways to grow your business is to ensure that both old and new customers experience a smooth customer journey from start to finish. This journey includes every step from the customer searching for you online or encountering your marketing campaign, to the purchase, payment and follow up procedures. This next stage in your company’s growth will present new opportunities to iron out creases in your processes, and you’d be smart to pass this convenience on to your customer. You could improve your website search function, simplify your customer communication channels by introducing convenient options such as live chat, or streamline your payments system by introducing a direct debit option, offering your customer a hassle free experience. A bacs bureau could help you get this up and running without the hassle of dealing direct with your bank.
For some, keeping up with rapid growth means that they don’t have the time or cash flow available to hire and train a team that can handle everything in-house. Outsourcing can be a good way to take pressure off your existing team and let them focus on essential tasks. Being assured of the expert handling of your day-to-day business processes will give you the headspace you need to keep looking for expansion opportunities.
Top candidates for outsourcing are call answering & general admin, HR & recruitment, IT & infrastructure support, accounting and payroll. Assess the strengths and weaknesses of your team to work out which tasks would be best kept in-house and which would be better outsourced, then do some research to find the best companies out there providing the services you require. Take a look at their client list to see if they will be a good fit for your business.
Get your cash flow sorted
The leading reason for businesses going under is cash flow shortages. Even though your business has performed well up until now, even enjoying rapid growth, the necessary expansion that comes with hitting the £1 million mark can introduce cash flow issues. Your outgoings will increase when you invest in your product, marketing, and operations as you grow your team, and there can be a delay before these investments start to pay off and generate incoming cash to match the business you’re setting out to become. Management accounting and cash flow forecasting are sound ways to pre-empt these challenges.
The origin story of so many large corporations goes something like this: one person starts selling something from their basement or garage, doing everything themselves, from customer service to accounting. As the business grows, they realise that their time is wasted on tasks like packing boxes, so they hire someone to do that. So it continues until the founder of the business does only very specific work that only they could do. When you hit £1 million in revenue, it’s time to ask yourself if you are spending your time in the most profitable way for your business. As the founder or CEO, leadership needs to be your primary role.
Hiring the right team is the first step. Invest time and money in finding and training capable people who understand and share your vision and energy. Once you have that team in place, resist the urge to micromanage. Placing trust in others might be scary at first, but unless you let people do their jobs, you won’t be able to focus on doing yours. A good question to ask yourself is whether or not your business could keep running without you in the office every day. If so, you’re golden.
Your existing customer base has brought you this far, and it can be tempting to double down on them. While you do need to retain your existing bread-and-butter customers, focus your marketing efforts on attracting new customers. To do this, you’ll need a solid marketing strategy that promises lead generation and conversion. Not only will generating new customers increase your revenue, but it will also broaden your awareness about the demand for your product and how it performs in the broader market, allowing you to adapt and expand your offering based on customer data.
Break out of your comfort zone
Crossing the £1 million threshold might give you a sense of security, but the best thing you can do for your business is to push yourself out of your comfort zone in terms of how your operate and invest. Unless you start thinking out of the box and stay open to new ideas and opportunities, you risk stagnating at your current revenue level, which can be demotivating for you and your team. Consider refreshing your team with new sales reps or leadership. You might seek out top candidates in your field, but don’t be afraid of industry crossover: people from other industries can bring new experience and perspectives, which can be a great catalyst for change and give you something your competitors lack. You might also consider technological upgrades to ensure your business remains at the cutting edge.
It might sound counterintuitive, but once you’ve hit £1 million you may need to start looking at larger funding opportunities. Upscaling your business is going to be key to your future success, and your first step will be investigating the options and evaluating the risks of the funding options available to you now that you’re a big fish. You’ll need to decide which aspects of your business will most benefit from investment and yield the greatest return. Depending on your business goals, you might decide to focus on Technology, Product, Marketing, Operations, or another aspect of your business that you think will lead to the most significant or sustainable growth. Once you’ve done these calculations, it’s time to start seeking capital. Thanks to your hard work, you’re not a small business anymore. The maturity and proven credentials of your business will open doors for you when it comes to bank loans and investment.
Hitting £1 million in revenue is an exciting goal for growing businesses but many people get so caught up in working towards this milestone that by the time they get there, they haven’t thought about what’s next. Successful founders and CEOs agree that you are going to have to change the way you work once you hit £1 million. If you let complacency creep in, your business risks stagnating or even falling behind. Get ready to work harder than ever. With these nine tips as a guide, you can embrace change with confidence.