How to Grow Your Small Business

1. Small Businesses Need a Flight Plan for Growth

I wrote this book so yours won’t [fail].

High Failure Rate. A significant percentage of small businesses fail within their first decade, highlighting the need for a structured approach to growth. Many businesses fail due to a lack of systems and processes, unlike larger corporations that benefit from established frameworks. Small businesses often lack the resources to absorb mistakes or inefficiencies, making a well-defined plan crucial for survival.

The S-Curve. Many small businesses face the "s-curve," where initial growth plateaus or declines due to operational challenges. This decline often stems from the owner being pulled away from their core strengths to manage problems, leading to poor decisions in hiring, inventory, and marketing. A proactive plan helps avoid this pitfall by establishing reliable systems.

The Airplane Metaphor. Visualizing a small business as an airplane with interconnected parts provides a clear framework for understanding how different areas contribute to overall success. The cockpit (leadership), engines (marketing and sales), wings (products), body (overhead), and fuel tanks (cash flow) must work in harmony to achieve sustainable growth.

2. Leadership: Define the Destination and Unite the Team

The primary job of the leader and the leadership team is to clearly define a destination and then reverse engineer a plan to get there.

Mission Statement. A compelling mission statement should include specific economic objectives, a deadline, and a clear reason "why" the mission matters. This clarity helps team members understand their role and motivates them to take action. Vague mission statements often fail because they don't provide a clear direction or inspire specific actions.

Key Characteristics. Identify the key characteristics necessary for every team member to embody in order to achieve the mission. These characteristics should be specific enough to guide hiring decisions but universal enough to apply to everyone in the organization. Examples include a love for serving people, an obsession with quality, or the ability to remain calm under pressure.

Critical Actions. Define three critical actions that every team member can take daily to move the business toward its financial objectives. These actions should be simple, impactful, and contribute to a positive company culture. Examples include offering samples to customers, reviewing client lists for special needs, or expressing gratitude.

3. Marketing: Clarify Your Message to Attract Customers

If you want to sell more products, talk about the aspects of your products that will help people survive and thrive.

Survival and Thrive. Customers are primarily attracted to information that helps them survive and thrive, so marketing messages should focus on these aspects. This means highlighting how products can save money, make money, improve health, or enhance relationships. Avoid focusing on internal company details that don't directly benefit the customer.

Simplicity. Marketing messages should be communicated simply and clearly to break through the noise and capture attention. Customers are bombarded with information and don't have time to decipher complex or confusing messages. Short, simple soundbites are more effective than lengthy explanations.

StoryBrand Framework. Use the StoryBrand Framework to create a clear and compelling marketing message that invites customers into a story. This framework involves identifying the customer's problem, positioning your product as the solution, and guiding them toward a successful outcome. The seven elements of the framework are:

• A character who wants something
• Must overcome a conflict
• Meets a guide
• Who gives them a plan
• And calls them to action
• So the hero can avoid failure
• And experience success

4. Sales: Make the Customer the Hero

Mastering sales conversations that invite customers into a story will increase the thrust of the airplane even more.

Customer-Centric Approach. Effective sales pitches focus on the customer's needs and position them as the hero of their own story. Avoid making the sales pitch about your company or its achievements. Instead, focus on how your product can solve the customer's problems and improve their life.

The Customer is the Hero Framework. Use the "Customer is the Hero" framework to structure sales conversations and materials. This framework involves identifying the customer's problem (red), positioning your product as the solution (purple), providing a clear plan (brown), highlighting the negative consequences of inaction (yellow), painting a picture of the positive results (blue), and issuing a clear call to action (green).

Follow-Up Emails. Craft follow-up emails that reinforce the customer's role as the hero and clearly explain how your product can help them achieve their goals. These emails should be concise, compelling, and include a strong call to action. By consistently applying this framework, you can transform sales conversations into engaging stories that close more deals.

5. Products: Optimize Your Offering for Demand and Profit

To grow a business, you need to know how to optimize your product offering so the airplane gets maximum lift.

Profitability Audit. Regularly assess the profitability of your products to identify which ones are truly driving revenue and which ones are weighing down your business. This audit should consider raw material costs, labor costs, and the impact of unsold inventory. Focus your marketing and sales efforts on the most profitable products.

Product Brainstorm. Continuously brainstorm new product ideas that can increase revenue and profit. Consider offering products that help customers make money, save money, reduce frustrations, gain status, create connection, or simplify their lives. Package existing products into subscription services or create certifications to leverage your expertise.

Product Brief. Before launching any new product, complete a product brief to assess its potential impact on your business. This brief should address questions about market demand, profitability, competition, and alignment with your overall business strategy. This process helps prevent wasted time and resources on products that are unlikely to succeed.

6. Overhead: Streamline Operations to Stay Lean

To grow a business, you’ll need to run a management and productivity playbook that ensures every team member is contributing to the overall economic priorities of the business itself.

Labor Costs. Labor is often the largest expense for small businesses, making it crucial to manage effectively. Instead of simply cutting staff, focus on streamlining operations and maximizing productivity. A well-defined management and productivity playbook can transform your team into a lean, revenue-generating force.

Management and Productivity Playbook. Implement a structured system of meetings and processes to align your team around your economic priorities. This playbook should include regular all-staff meetings, leadership meetings, department stand-ups, personal priority speed checks, and quarterly performance reviews. These meetings help ensure everyone is focused, productive, and contributing to the company's goals.

Meeting Structure. The five meetings are:

• All-Staff Meeting: Maintain alignment and focus around the three economic priorities
• Leadership Meeting: Update the entire team about any department initiatives or successes
• Department Stand-up: Ensure each department is working on an initiative or initiatives that support the three economic priorities
• Personal Priority Speed Check: Provide ongoing coaching is critical to keep productivity and morale high
• Quarterly Performance Reviews: Carefully assess each team member’s performance

7. Cash Flow: Manage Money Like Fuel for Your Flight

To grow a small business, you’ll need a method for managing money that is simple and easy to use.

Five Checking Accounts. Manage your small business finances using five separate checking accounts: Operating, Personal, Business Profit, Tax, and Investment Holding. This system provides clear visibility into your financial health and helps you avoid common pitfalls. Each account serves a specific purpose, ensuring that money is allocated appropriately.

Account Allocation. All revenue flows into the Operating Account, from which you pay bills and transfer a fixed salary to your Personal Account. Excess funds in the Operating Account are then split between the Business Profit and Tax accounts. The Business Profit account serves as a rainy-day fund, while the Tax account ensures you have enough money to pay your taxes.

Investment Holding. Once the Business Profit account reaches a certain threshold, transfer excess funds to an Investment Holding account for long-term wealth building. This account can be used to invest in real estate, stocks, or other assets that generate passive income. By managing your cash flow effectively, you can ensure the long-term financial stability of your business and build personal wealth.

Last updated: February 16, 2025