By Bill Silverman
If you’re like most painting company owners who are looking to grow sales and profits this year, you may be seriously considering (or are already in the process of) either:
Or maybe you’re thinking about entering a new market and adding new services. That will give you lots of opportunities for profitable growth, right? Probably not!
To understand why, I want to share with you a simple but powerful way to think about a growth strategy for your business.
You may find it hard to believe, but when you boil down all the possible growth strategies for your business, you only have four options. You can:
If you put these options together, they form a matrix that describes your growth strategy options.
So, what is the best growth strategy option for your business?
First Step: Mastering Delivery of Existing Services to Existing Market
For most companies, the first and most effective strategy for growing sales and profit is to work on improving the delivery of existing products and services to your existing market. That means:
Have you mastered these three critical activities with your existing market and services? If no, then you your best option to grow is usually to focus your energy, time and effort on improving the delivery of your existing services to your existing market.
Second Step: Only Add a New Market or Services After Mastering Current Market and Services
Attacking a new market or adding new services requires a significant learning curve and adjustment period, and will almost always create problems and disruption in your business. Remember all the effort that it took to launch your business? Wasn’t easy, was it? Well, entering a new market or adding a new service will require significant effort, new skills and new learning which will cause major disruptions that will distract you from being effective with your existing market and services.
Think, for example, about a residential painting company entering the commercial market. The commercial market has a different lead generation process, sales process, sales cycle, delivery requirements, and even payment terms and timing that the residential painter will need to master for success. That’s a tall order that will take much planning, preparation and resources.
My advice to you is to crack the code on your existing services, dominate your current market, and build your customer base first. It is far better to be the best at one set of services for one market than to be mediocre at a menu of services for multiple markets.
Once you’ve mastered your current market and services, then either:
Which one is easier? That depends on a lot of factors, such as how different the new market or service is from your current ones, and what types of skills and experience are available on your team. If you have a residential painting company, for example, and want to offer pressure washing to your existing market, that’s a much simpler new service to offer than if you decide to offer gutter guards, garage door replacement or vent cleaning. Or if you’re a residential contractor who has no commercial experience you’re going to have a tougher hill to climb entering the commercial market than if you have someone on your team who has 20 years of commercial sales and delivery experience.
If you have several options and need to decide which one is best for you, evaluate the complexity of the services or market, how different they are from the skill set you have available in your company, and the greatest potential profit gain. Pick the growth strategy with the greatest profit impact that you’re in the best position to execute.
To ensure success, you will need someone that you can dedicate to leading the effort. If no one owns a goal or everyone does, it usually doesn’t get accomplished. Remember, you can’t make yourself the owner for everything! You already know that doesn’t work!
A Word of Caution
Entering a new market and adding new services at the same time can be detrimental to your company’s (and your) health.
Trying to enter a new market with new services is a very complex endeavor and should not be attempted unless you are a mid to high 7-figure or larger business with significant resources to dedicate to this effort. Even then you should think twice about this growth strategy. It’s the equivalent to launching a completely new business while you try to run your existing business. It can bring your company to its knees. I’ve seen this happen—even in large corporations—so proceed with extreme caution.
Most contractors’ that I talk to want predictable, controlled growth in both sales and profit while minimizing chaos, stress and problems. The matrix I’ve presented here gives you a framework to think about your growth strategy to help you achieve these goals while avoiding missteps that can be both costly and disruptive to your business. Use it!
Bill Silverman is the owner of Springboard Business Coaching. He is dedicated to helping you propel your business to the next level of growth and profit while you work less. He can be reached at (856) 751-1989(856) 751-1989 or firstname.lastname@example.org.