In their recent post, McKinsey & Company suggested that ‘building new businesses amid volatility tends to reward companies with higher revenue growth and earnings compared with peers that pull back'. We at Hyfin wholeheartedly agree, and we believe that these principles should be applied regardless of the economic climate.
We’d like to suggest the following additions to McKinsey’s points:
Identify Your Core: What is your organisation’s unique selling proposition or niche? What do your customers appreciate most about your service? What areas do your customers least appreciate, and what can be done to amend these? Your key services should be the focus of your investment and growth efforts.
Outsource Essential but Low-Value Services: Many services that companies offer are necessary for clients, but the cost of providing the service internally, and the resulting revenues generated, do not justify significant investment. For these services, consider outsourcing to third-party companies that can provide the service for your client while minimizing your personnel, technology, and infrastructure costs.
Discover Correlations: Learn from retail strategies which cross sell products and services, for example: “Customers in these segments who bought X also bought Y”. Use data to identify upselling opportunities that closely align with your main business.
Re-calibrate Low-Value Clients: The old 80/20 rule typically applies to most businesses, with 20% of clients generating 80% of revenue. Unless you’re a B2C business, it’s likely closer to 90/10. Ultimately, it’s faster to generate revenue from an existing client than to identify and onboard a new one.
Invest in Your Staff: Your employees are one of your most valuable assets, and replacing them is costly. Changing required skill sets and developing efficient practice can be achieved by investing in your staff by training them in future initiatives and technologies to drive change.
History has shown that building new businesses amid volatility tends to reward companies with higher revenue growth and earnings compared with peers that pull-back.
Learn more about the power of an offensive entrepreneurial strategy and five business-building approaches that are gaining traction. https://mck.co/3VVvUS3
