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When it comes to business, growth is key. Without a growth plan, your business will likely stagnate and eventually fail. But how do you create a growth plan to make your business thrive? Knowing where to place your efforts is often difficult when starting a business. You may have a dream of where you want your business to be in the long term, but how do you get there?
A growth plan is critical for any type of business.
If you have just started your business and created the first product, you may now be overwhelmed with everything you think you should be doing, but you just don’t have enough time to fit it all in.
If you want to know where to put your effort to get the highest return, I’ve created a growth plan to help you get there.
This growth strategy incorporates 5 stages to coincide with where you are on your business journey. Once you know what Stage you are at, you can try some of the tried and tested actions to help you move forward. Each Stage is driven by your actual data. No more floundering in the dark, wondering what to work on. It will give you clear and decisive actions to take so you focus on what is needed to grow your business at this exact time.
It will use your sales data and statistics to determine where you are on your journey.
What is a Growth Plan?
A growth plan is a structured approach to achieving your goals. It’s an organised and systematic way of going about things to achieve your goals. A growth plan is essentially a roadmap for your business. And it will help you to make sure that you’re able to hit all of your targets.
The planning process: Set achievable goals
Before you start, you need to define what your goals are for your business. Only once you know your goals can you know what to work on.
Initially, we are looking at short-term goals. Something that could be achieved in the next year. Your goals should reflect what you think is realistic to manage, create, ship, etc., with your available time.
Taking it slow and steady will help you create routines and enjoyable processes. This will set you up for whatever comes your way.
What goals and metrics do you need to think about?
- Firstly, what monthly take-home pay would you like to make each month?
- What are the regular monthly expenses? Knowing what you have to pay to keep your business running is vital. You will need to meet these costs as a minimum to keep your business running.
- What is your average order value? Knowing the average amount you are hoping to make is helpful if you have products at various price points.
- What is your target conversion rate? The average value for online sales is between 1 and 3%, so pick a value that you think represents your business.
Your revenue goal is your target monthly take-home pay + your regular expenses.
The number of orders you need to get your revenue goal = revenue goal/average order value.
You can now calculate how much traffic (visits) you need to generate your revenue goal.
Target Visits = (number of orders/conversion rate) x 100
If you want to know more about these statistics, check out this post.
Prioritise growth areas
There are several growth areas that you could work on, such as increasing traffic, increasing sales, increasing revenue, and increasing your average order value, to name but a few.
In an ideal world, you would focus on all the growth areas at once, but in the real world of a small business, there are only so many hours in a day, and there is only you. So you need to plan how and when to tackle each area.
Isn’t increasing traffic always the answer
Getting traffic is key to making sales; if no one sees your products, no one will buy them. But if your product doesn’t entice people to buy, you have to generate more traffic to get a sniff of sales. Yet if your product is already selling well, getting it in front of more people will more easily create more sales. This is where understanding your conversion rate is vital.
Using the figures you calculated earlier, it’s time to follow my growth strategy. Taking the appropriate action at the right time will minimise your effort to maximise your revenue.
The easy growth plan for small businesses
Each month review your actual data against your target data and use the flow below to determine what Stage you are currently in.
Once you know what Stage you are at, use the following process flow to find actions you can take to move out of that Stage.
Because your data is constantly changing, I would recommend reviewing your data monthly to ensure you are heading in the right direction.
Your actual visits are less than 25% of your targeted visits.
Until you exceed 25% of your target visits, your focus should be to get more visits (traffic) to your shop.
Here are some actions you can take to increase your traffic:
- Work on your SEO. Improving your SEO will see you placed higher in searches, resulting in more visits. Be careful not to use the same keywords for all your listings, as you will end up competing with yourself.
- Promote yourself on social media. This is an ideal time to start spreading the word about your business.
- Promote yourself with paid ads. Because you are only at stage 1, you haven’t had enough traffic to judge how well your products sell. So, don’t spend much money on advertising unless you are confident about your conversion rate.
- Add more products or content. Adding more products or content to your website means there are more opportunities to find you.
Your conversion rate is less than your target.
Once you have more traffic, you must ensure your products are of good enough quality to get sales. Your focus at this point should be on the quality of your products to improve your Conversion Rate.
Improving your products will make it easier for the visitors you ARE getting to want to buy your items.
Here are some actions you can take to improve your conversion rate:
- Always make sure your images are the best they can be. You need to be better than your competition.
- Write better descriptions, making sure you answer any possible questions. Tune in to the benefits your customer will get by buying your product.
- Make sure your pricing, processing times and shipping costs are appropriate.
- Make sure you don’t direct people to your products who have no intention of buying them.
You can find more information about the importance of your conversion rate here. It also provides more suggestions for improving your conversion rate.
Your average order value is less than the target?
Once you get a reasonable amount of traffic AND know your items sell, checking your average order value is helpful. Is this meeting your target?
If your average order value is lower than your target, you should investigate why and try to increase your average revenue per order.
Here are some actions you can take to try and increase your average order value:
- Promote and market your higher-value items more.
- Create higher-value listings
- Increase the price of the lower-priced products that are currently selling well
- Bundle up some of your products together. This gives the customer a good deal, and you get more spent per order.
- If you sell your products in packs, try increasing or decreasing the number in a package. If you price this right, you can see what works best for your customer.
- Encourage multi-buy offers.
Try a combination of any of these tactics to try and increase the amount of money spent per order.
Your revenue is less than your revenue target.
If everything else is working, but you are still not hitting your revenue target, then you need to figure out why.
This could be because you are also not hitting the number of visits you need to bring in your target revenue.
Your focus here is to get more visits to your listings, i.e. get more traffic.
Here are some actions you can take to try and increase your visit numbers:
- Concentrate more on marketing and promoting your shop and its listings
- Add some new listings
- Review your most visited listings and see which ones are NOT selling well, i.e. they have a LOW conversion rate. These listings are already getting a fair amount of visits which means your SEO is good. If you can improve the listing quality (images, descriptions, etc.), you should enhance their sales.
- Review your least visited listings and see which ones are selling well, i.e. they have a HIGH conversion rate. These listings are selling well even though they only get a few visits. So if you can increase the number of visits they get, the sales should also increase. This means working on the SEO of these listings.
Success! You are meeting your revenue target.
You are currently on track to reach your yearly revenue target.
If you are only halfway through the year, you are not there yet. So don’t lose focus now.
Unfortunately, trends and popular keywords change. Even your competition can increase.
Listings that were doing well can suddenly bomb through no fault of your own.
Make sure you work consistently on your marketing, add new listings or work on the SEO of poorly performing listings.
Keeping on top of these activities is vital to stay on track.
At the end of the year, it’s time to review your goals. The growth strategy doesn’t change, but your goals might.
If you met your targets, why not increase your goals? You are clearly doing something right!!
Increasing your goals may take you back to a previous stage in the growth strategy. But don’t worry, just work on the actions appropriate to your new Stage, and you will soon get to the next level.
We have created the Etsy Shop Statistics Tracker to help you make this growth strategy work for you. It takes the effort out of what needs working on. You simply enter your monthly stats, and it tells you where you are and what needs doing.
Don’t feel that the actions described in the above stages are only worth doing if you are at that Stage. Of course, you could do any of the above activities at any point. But this process has been developed to help you focus on the best thing to do based on where you are now. But every business is different.
Adding new listings, looking at your SEO and promoting your existing products is never a wasted effort.
But if you have only got a limited time to work on your shop, concentrate on the actions for the step you are currently at. This will give you the best bang for your buck.
Please let me know how you get on.