I have been building businesses my entire life.
From the time I was a little kid, I was always looking for ways to make a little extra money. I ended up starting my first business in high school, selling plumbing supplies at the local flea market.
Fast-forward twenty years, and my flea market business had turned into a publicly traded company doing more than $600 million in revenue and employing more than 2,300 people with 60 distribution centers across the US, Canada, and Puerto Rico. In 1999 Forbes named our company, Wilmar, “one of the 200 best small companies in America.”
Not long after, in 2001, I left as CEO, and later fully exited the company as Chairman in 2005. Home Depot went on to buy the company in 2015 for $1.8 billion, and still own and operate it under their brand today.
Since then, I’ve built a number of other companies, including my current company, LendingOne, as well as invested in a number of companies as an investor. I also have dozens of stories from my own journey as an entrepreneur in my book, All In. I have certainly learned, the hard way, what it takes to get a company off the ground, and then what it takes to scale it.
If you are looking to grow your own business in 2020, here are 3 strategies I always encourage entrepreneurs to consider:
Don’t be afraid to take on debt (especially in our current economy).
Entrepreneurs love the idea of raising money.
But what many don’t realize is that if they can get their business to the next level without giving up equity, they are going to make a whole lot more money in the long run. Taking on an investment essentially means giving up a portion of future profits in order to get yourself to where you want to be, faster. But if you’re so sure about your ability to scale, why not use debt?
The federal funds rate is currently set in a 1.5 to 1.75 percent range. This is .80% lower than one year ago. With debt, you aren’t giving up equity in your company, and you also aren’t paying a premium in order to pay it back. It’s an extremely viable option for businesses that are already cash-flow positive and see a clear path forward.
Double-down on making your customers as happy as possible.
A lot of entrepreneurs hyper-focus on growth metrics.
In reality, your business is always a reflection of how happy your customers are. If you are going above and beyond for your customers, they’ll be the ones who grow your business for you. However, if you assume your customers are happy but don’t actively check-in on the experience they’re having, no amount of sales or clever marketing or big partnerships are going to solve your problem. For every new customer you bring in the door, two more will leave.
Here are a few things I would encourage you to do:
Ask customers directly if there’s anything else you can do for them. How else can you make them happy?
Work hard to resolve complaints and issues as quickly and as effectively as possible.
Look for small, cost-effective opportunities to surprise them and make them feel taken care of.
Live by the phrase “The customer is always right.”
Set concrete goals for the business and have an action plan for how you plan to reach those goals.
Every entrepreneur loves saying, “This is the year we scale like crazy.”
Well, in order for you to reach those goals, you need to have an awareness of what it’s going to take to reach that goal in the first place. If you want to double your sales, do you have enough people in place? How many sales calls are you making every week? What’s your conversion rate? If you bring in leads via Facebook ads, what’s your conversion cost? What’s your ad budget?
These are the questions you should be asking — and just by doing some simple math, you’ll know if your goal is even possible in the first place. You can’t expect to double sales, for example, if doubling would mean bringing in 10x the number of new customers you’ve ever had. It’s far better to have realistic, actionable goals, than goals that sound great but never materialize.