How to Grow Your Small Business
Donald Miller

How to Grow Your Small Business - Book Summary

A 6-Part Strategy to Help Your Business Take Off

Duration: 21:11
Release Date: November 16, 2023
Book Author: Donald Miller
Categories: Management & Leadership, Marketing & Sales, Entrepreneurship
Duration: 21:11
Release Date: November 16, 2023
Book Author: Donald Miller
Categories: Management & Leadership, Marketing & Sales, Entrepreneurship

In this episode of 20 Minute Books, we delve into the world of business expansion through the insightful book, "How to Grow Your Small Business".

This insightful 2023 publication serves as a six-step guide designed to help your business lift off and reach new heights. The author, Donald Miller, recognized a lack of concrete, step-by-step instructions for business growth when he began expanding his own operations. His once small home content business morphed into a twenty million dollar company, inspiring him to write the book he wished he'd had.

Donald Miller is not just an author, but a recognized public speaker, and the CEO of his company, StoryBrand. His bibliography extends across varied topics - business, spirituality, family - including the New York Times bestsellers "Blue Like Jazz" released in 2003, and "Building a StoryBrand" released in 2017. Moreover, he is the host of the widely followed podcast, Business Made Simple.

So, who should make time to absorb the wisdom found in "How to Grow Your Small Business"? If you're a small business owner, an entrepreneur, or simply someone who feels they spend too much time dousing the fires in their business rather than focusing on growth, this book is a must-read for you. Stay tuned, as we unravel the key takeaways and insights from this business guide.

Navigate the turbulent skies of small business expansion

Picture this: you're visiting Donald Miller's office, and your eyes land on an intriguing object — a model plane perched majestically on his desk. This plane, as it turns out, holds the secret to the growth of Don's business, StoryBrand, a marketing firm that was once teetering on the edge of uncertainty. Although the firm had clients and was indeed growing, it seemed like Don was perpetually quenching fires, rather than indulging in his true passion — creating compelling content for his customers.

Brace yourself for a sobering statistic: nearly half of all small businesses shutter within the first five years of operation. The trickiest challenges usually rear their heads during the expansion phase.

Imagine for a moment that your small business is sailing smoothly. Customers can't seem to get enough of your product, demand is surging, but you're aware that growth is crucial to capitalize on this momentum. So, you broaden your team, pour money into advertising, and overinvest in resources to gear up for future growth. Suddenly, your overheads skyrocket while your customer service plummets. Frustrated clients express their discontent, and you find yourself scrambling to extinguish the flames, instead of doing what actually catapulted your business to success in the first place.

This was precisely the conundrum gnawing at Don's mind when he glanced at the model plane on his shelf. He picked it up, turning it over thoughtfully, realizing that six crucial components are vital for an airplane to take off and accomplish its journey safely.

Think of your business as an airplane.

Allow me to elaborate.

Your leadership team is the cockpit, navigating the business towards its destination. The wings represent your product, generating the lift essential for your business. Your marketing and sales are akin to the dual engines, propelling your business forward and supplementing the lift. The body of the plane embodies your overhead and operational costs, while your cash flow fuels the entire operation.

This airplane metaphor offered Don a fresh perspective, enabling him to forge intuitive decision-making processes and craft narratives to steer his company's growth. As we journey through this summary, we'll formulate a Small Business Flight Plan to ensure your small business lifts off and soars with confidence.

The command center - the power of leadership

Picture an airplane just before takeoff. The pilot in the cockpit already knows the desired destination and the intended time of arrival. Similarly, the leadership team of your small business, which we can compare to the cockpit, should have a clear vision of the final goal. And that's where crafting a meaningful Mission Statement comes into play.

Unfortunately, most Mission Statements tend to be a nebulous cloud of words, often finding a place on a company's website only to be forgotten later. For your Mission Statement to truly matter, it should be more than a statement — it should be an inspiring mission, inviting your team to partake in an exhilarating story where they play vital roles.

Three elements are essential for an effective mission statement. The first element is a clear goal. In any gripping story, it's evident early on what the protagonist is aiming to achieve: the dragon must be defeated, the robber apprehended, the antagonist thwarted. Similarly, outline three specific, measurable economic goals that your team can rally behind. Remember, specificity breeds clarity and momentum for your mission.

The second ingredient to infuse into your mission statement is a deadline. This might evoke a touch of apprehension, but deadlines spark a sense of urgency within your team. Ideally, the timeline should not extend beyond two years.

Lastly, your mission statement should be seasoned with purpose. It gives your mission weight, and provides your team with a compelling reason to care.

Let's illustrate this with an example for a newspaper company:

"Our aim is to boost our subscriber base by 30 thousand, augment the number of advertisers by 30 percent, and enhance our average client investment to twenty-one thousand dollars within the next two years. We do this because quality journalism has the power to influence the nation."

Did you notice the triple components of this mission statement — the trio of measurable goals, the fixed timeline, and the overarching purpose? Once you've put your mission statement to paper, ensure it's omnipresent. Display it on office walls. Recite it in meetings. When it's time for your mission statement to evolve, celebrate the transition.

Now that your team is privy to the destination of the flight, let's delve into how to get there.

The right propeller - mastering marketing

Many entrepreneurs are under the impression that the secret sauce of successful marketing is the aesthetic appeal of a brand. However, Don's experience tells a different tale. Much like how stories can invigorate your team, storytelling can act as a magnetic force, pulling in your customers and retaining their attention.

Consider inviting your customer to don the mantle of the hero in their own story. While your product might be the enchanted sword that vanquishes the dragon, it's effective only when it's wielded by the hero. Your initial step should involve pinpointing the fundamental problem your customer is grappling with, and illustrating how your product is the flawless tool to triumph over that problem.

The customer, of course, is the protagonist in this story. So, who do you become? The trusted guide, akin to Gandalf or Yoda from timeless tales. You're the one who knows where the magical sword is hidden, and you possess the map that leads to it. Present your customer with a three or four-step journey they need to embark on in order to acquire your product and, consequently, resolve their issue.

What comes next is a compelling Call To Action, coaxing your customer to undertake that first step. Employ dynamic, commanding language such as "Buy now" or "Schedule an appointment". Remember, people are more likely to respond when they are specifically called upon to act.

Let's breathe life into this story-centric marketing strategy with an example. Imagine a hotel booking service crafting its marketing message.

"Planning a holiday can stir up unnecessary stress. You should be unwinding on a beach, not getting entangled in scheduling woes. That's why we've taken it upon ourselves to rid your hotel booking process of any stress. It's truly easy! Simply select your preferred destination, uncover the best deals, and let us take care of the details. Start your booking process with us, right away!"

Even within this condensed text, we recognize the outlined problem, suggested solution, detailed three-step plan, and invitational call to action. It's time to ask yourself: What issues is your customer trying to overcome with your product? How can you serve as their insightful guide along that journey?

The left propeller - the art of sales

Engaging in sales-oriented conversations often leaves a sour taste in people's mouths. The perceived pushiness and manipulation can be rather off-putting. However, if you intend for people to purchase your product, standing as its advocate is crucial. The sales pitch, much like the left engine of an airplane, forms an essential part of your business.

If the idea of manipulation during a sales pitch makes you flinch, here's a straightforward solution: abstain from any manipulative behavior. The objective isn't to cajole someone into buying something they have no need for. As the owner of a small business, the last thing you'd want is a clientele base plagued by dissatisfaction. When conversing with potential customers, your first move should be to ascertain if they belong to your target demographic.

Or, in simpler terms, do they have an issue that your product can effectively solve?

Picture this. You're at a social gathering and you happen to meet a seamstress. When you inquire about her profession, she greets your question with a query of her own. "Have you ever had the experience of buying clothes online, only to find them ill-fitting when they're delivered? I provide a service where I tailor my clients' clothes to fit them like a glove, ensuring they always present their best selves."

Here, she has drawn you into a narrative. If you aren't her intended audience, the conversation naturally shifts to other topics. But if you confess that you've got a heap of clothes waiting to be returned due to poor fit, you might find yourself eager to hear more.

"I offer the first fitting free of charge. Subsequently, I can adjust any clothing you wish to get altered, and even store your measurements for future reference, making the process swift and hassle-free next time. If this interests you, I have an available slot this Friday."

Notice how this dialogue mirrors the storytelling structure discussed earlier? Problem, solution, three-step plan, call to action. The beauty of a sales pitch lies in the instant feedback loop it offers with your customer. In fact, your sales pitch could become one of the most genuine methods to sell your products!

The wings - refining your product

Now that we've delved into the mechanics of selling products, let's rewind a bit. Consider the engineers designing an aircraft. The wings undergo rigorous tests in wind tunnels before they're deemed ready for flight. The last thing they want is to assemble an entire plane only to find out the wings don't offer the requisite lift.

As your business matures, it becomes critical to evaluate and tweak your product range.

The first strategy to consider is to retire products that aren't contributing to your bottom line. It can be challenging to come to terms with the fact that certain products simply aren't pulling their weight. Here's what you can do: Rank your products based on profitability. Examine the cost associated with producing, marketing, and distributing each product. You might stumble upon a few products that don't warrant the effort being poured into them.

Carrying out this exercise also shines a spotlight on those products that are performing admirably. As a small business, it's highly likely that you haven't completely tapped into your market. In general, it's easier to drive the success of an existing, profitable product rather than venture into creating something new.

When the time comes to introduce new products, utilizing a Product Brief can be a great way to test the waters. New ideas can be exhilarating, and the temptation to dive headlong into them can be strong. However, don't forget our wind tunnel analogy. It can spell disaster if you find out your shiny new wings are underwhelming once you're already mid-flight.

A product brief serves as a reality check for a new product. It should address queries about target demographics, probable competition, and financial considerations. This early-stage evaluation can save you from squandering resources on non-performing products. Moreover, it can illuminate exciting opportunities for future enhancements and innovations.

Remember, your marketing and sales engines might be powering the aircraft, but it's your products, the wings, that keep you soaring high in the business sky.

The body - managing overheads and operations

Every overhead expense your business incurs contributes to the weight of your metaphorical aircraft's body. If it becomes too heavy, you're headed for a crash landing.

For a vast majority of businesses, labor constitutes the heaviest overhead.

Fear not. Curtailing labor costs doesn't necessarily translate into giving your team members the boot. By aligning your team around shared goals and optimizing your workflow, you can ensure your business stays airborne without resorting to layoffs.

A case in point is Don, who noticed that as his business expanded, communication lines began to blur. At one juncture, he discovered a team member who had been working tirelessly on a project that had been shelved a month earlier. No one had thought to inform them.

To remedy this, Don implemented a system of five meetings that remarkably improved communication and cut down wasted time.

The first was a weekly All-Staff Meeting involving the entire team. The agenda was to keep the team attuned to the company's mission statement, share crucial updates, and boost team morale. Following this meeting, the leadership team would hold a brief huddle. This approach helped Don foster unity across his business from the top down.

As your business grows, distinct departments begin to take shape. When this happens, consider instituting a Department Stand-Up Meeting. In Don's case, department heads conduct these brief meetings every weekday to connect with their teams. A stand-up meeting, true to its name, should never drag on to a point where someone feels the need to sit down.

Everyone in your organization should have a clear understanding of their role and how it aligns with the economic priorities delineated in your mission statement. To facilitate this, Don's team commenced Personal Priority Speed Checks, weekly one-on-one coaching sessions between a team member and their immediate supervisor. During a Quarterly Review Meeting, team members are offered broader feedback and briefed about their compensation packages' expectations.

After implementing these five types of meetings, Don saw a considerable increase in his revenue — by over 20 percent — and a nearly 30 percent jump in profits, all without resorting to a single layoff.

The fuel - managing cash flow

Every component of your small business runs on one common fuel - cash. Hence the reference to the financial bottom line. If you've been diligently following the Flight Plan thus far, you should be seeing some revenue trickling in.

The final topic we will broach revolves around managing your cash flow.

The cardinal mistake many small business owners commit is merging personal and business finances in one account. Contrarily, you should have five distinct accounts for your business and yourself: an Operating Account, a Personal Account, a Profit Account, a Tax Account, and an Investment Account.

The Operating Account serves as the hub of your business's financial transactions. It's where the revenue flows in and where expenses such as bills or salaries are paid from. If you haven't done so already, assign yourself a fixed salary, which should be credited to the Personal Account. It's vital to differentiate the money that's rightfully yours from the cash needed to keep your business engine humming.

Next, establish a high-water mark for your Operating Account. This refers to a sum sufficient to cover the largest single payment you have to shell out in a month. For instance, if your monthly payroll equals twenty-five thousand dollars, it would be prudent to ensure your Operating Account maintains a balance of at least thirty-five thousand dollars. This way, you're assured of meeting your payroll obligations.

Any surplus over your high-water mark should be equally divided between the Profit and Tax accounts. This approach enables you to build a cushion for lean times and ensure you're prepared when tax season comes around. Should your Operating Account run dry, you can shift funds back into it. With these three accounts in play, your business airplane will always have enough fuel to complete a few laps around the runway if needed.

When you find your business thriving and notice your Profit Account burgeoning, it's time to set a high-water mark for this account as well. This should be approximately six times the high-water mark of your Operating Account. Any amount over this can be transferred to the final account - the Investment Account.

These funds represent your profits, and you can use them as you see fit. As the name indicates, investing this money would be a wise move.

Wrapping it up

Observing your small business blossom and lift off is a truly exhilarating journey, though making decisions that facilitate this growth isn't a walk in the park. Quality and service should never be compromised. Adhering to the Small Business Flight Plan can help your business stay airborne, irrespective of stormy skies.

Do not feel compelled to implement all the steps we've discussed in one fell swoop. Navigating through your Flight Plan takes time, and the sequence in which you do this should be dictated by your business's unique needs. Even minute enhancements can bring about monumental changes.

Bear in mind the six key components of your airplane:

The leadership in the cockpit. The powerful duo of marketing and sales engines. The wings symbolizing your product offerings. The body, housing your overhead and operational costs. And lastly, the cash flow that serves as the essential fuel. All these elements are equally critical and should scale in harmony with each other.

By adopting this aviation metaphor, you will nurture an instinct for business growth that will continue to serve as your compass as your venture reaches stratospheric heights.

Bravo! You're now ready for takeoff.

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