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Marketing & Sales16 min read
How to Grow Your Small Business
by Donald Miller
A 6-Part Strategy to Help Your Business Take Off
Published: April 13, 2023
4.6 (198 ratings)
Book Summary
This is a comprehensive summary of “How to Grow Your Small Business” by Donald Miller. The book explores a 6-part strategy to help your business take off.
what’s in it for me? your small business flight plan.#
Introduction
donald miller, how to grow your small business, a six-part strategy to help your business take off.
the key to donald miller's small business success is a model plane sitting in his office.
looking back, it seems difficult to believe that don's marketing business, storybrand, was struggling.
he had clients, the company was growing, but don had found that he was spending more time putting out fires than doing what he actually loved, creating content for his customers.
45% of small businesses fail within the first five years.
often, the biggest problems actually happen when you're trying to expand.
let's say your business is going well.
you have a product that consumers love, demand is up, but you know you need to grow to make the most of it.
so you hire a few people.
maybe you sink some money into advertising.
you overinvest in resources, getting ready for more growth.
soon, your overheads are high, but somehow your customer service is down.
clients are upset.
you, like don, are running around putting out fires instead of doing the thing that makes your business successful in the first place.
this is the problem that don was thinking about when he spotted the model plane on his shelf.
he picked it up and he turned it over in his hands a few times.
there are six parts, he realizes, that are essential for a plane to take off and complete a journey safely.
your business is an airplane.
let me explain.
the cockpit is your leadership team, steering the plane where it needs to go.
the wings are your product, creating lift for your business.
the two engines, which represent your marketing and sales, propel your business forward and contribute to that lift.
the body of the plane is your overhead and operational costs.
and fueling it all is your cash flow.
the metaphor for the plane helped don to develop an intuition for making decisions and building narratives to guide his company's growth.
over the course of this chapter, we're going to develop a small business flight plan to help your small business take off safely.
your cockpit.
your cockpit - leadership#
leadership.
before your plane even takes off, the pilot knows where and when it's meant to land.
the cockpit of your small business is your leadership team, and you, like a pilot, should know where you want to end up.
for a business, this means writing your mission statement.
most mission statements are too vague.
they end up plastered on a company's website and forgotten.
to be useful, your mission statement should be an actual mission, inviting your team into a story where they are a key character.
there are three components to a mission statement.
the first is the goal itself.
in a story, it's always clear early on what needs to be accomplished.
the dragon needs to be slayed.
the thief caught.
the villain stopped.
you should set out three measurable economic goals that your team can rally around.
be specific.
specific goals give your team a clear objective and lends your mission some traction.
then, your mission statement should include a deadline.
people are sometimes nervous to include fixed dates, but deadlines can create urgency in your team.
ideally, the timeline shouldn't be longer than two years.
finally, your mission statement should include a purpose.
not only does this give your mission stakes, but it gives your team a reason why they should care about it in the first place.
let's look at an example for a newspaper.
we will increase our subscriber base by 30,000 and the number of advertisers by 30%, and our average client investment to $21,000 all within two years, because good journalism can change the country.
notice the three parts to this mission statement.
the three measurable goals, the timeline, and the purpose.
once you've written your mission statement, you should try to use it as often as possible.
put it on the wall, read it at meetings, and when your mission statement changes, mark the event with fanfare.
so, now that your team knows where the plane is going, let's take a look at how it's going to get there.
your right engine.
your right engine - marketing#
marketing.
a lot of business owners believe that successful marketing is all about how a brand looks.
don's found that this isn't true.
just as stories can motivate your team, storytelling is the key to capturing your customer's attention.
invite your customer to be the hero of their own story.
your product might be the magic sword that kills the dragon, but it's only useful when it's in the hero's hand.
start by working out what essential problem your customer has, and how your product is the perfect tool they need to solve it.
if the customer is the hero, then you are their trusted guide.
think of yourself as the gandalf or the yoda of the story.
you know where the magic sword is, and you have the map to get there.
give your customer the three or four steps they need to take in order to purchase your product, therefore solving their problem.
now, you need a call to action that invites your customers to actually take that first step.
use strong directive language.
buy now.
schedule an appointment.
people tend to only act when directly invited to do so.
let's see what this storytelling strategy looks like in practice.
here's an example that a hotel booking service might use in its marketing.
organizing a holiday can be stressful.
you'd rather be relaxing on a beach, not worrying about schedules.
that's why we've taken the stress out of booking your hotel.
it's easy.
simply choose your destination, find the best deals, and let us sweat the details.
book with us now.
even in this short text, we see the problem, the solution, a three-step plan, and a call to action.
ask yourself what problems your customers are trying to solve with your product, and how can you guide them best on that journey?
your left engine.
your left engine - sales#
sales.
a lot of people hate to have the sales conversation.
maybe you feel like you're being pushy or manipulative, but if you want people to buy your product, you need to advocate for it.
the sales pitch makes up the left engine of your plane.
the easiest way to avoid feeling manipulative in a sales pitch is easy.
don't manipulate people.
the goal is not to convince someone to buy something they don't want.
in fact, as a small business owner, dissatisfied customers are the last thing you need.
when talking to someone in a sales setting, first, check that they are actually your target audience.
in other words, do they have the problem that your product can solve?
let's say you're at a party, and you meet a seamstress.
when you ask her what she does, she responds with a question.
have you ever bought clothes online?
and when they arrive, maybe they don't sit right?
well, i adjust my clients' clothes to fit perfectly, so they always look their best.
here, she's invited you into a story.
if you aren't her target audience, that's fine.
the conversation moves on.
but if you admit that you have a pile of clothes at home you've been meaning to return, then maybe you'll want to hear more.
i do the first sizing for free, then i can adjust any clothes you want done and store your measurements so it's quick and easy the next time.
if you're interested in trying, i have an hour free on friday.
see how that conversation fits the story structure we talked about?
problem, solution, three-step plan, call to action.
the benefit of a sales pitch over marketing is that you have the real-time feedback of your customer.
your sales pitch can end up being one of the most authentic ways to sell your products.
your wings.
the product.
your wings - product#
okay, so we've talked about how to sell our products.
let's take a step back.
when engineers are designing a plane, the wings are tested in wind tunnels before they're ready to fly.
you don't want to build a whole plane just to see if the wings give you any lift.
as you grow your business, you'll need to evaluate and optimize your product offerings.
the first way to do this is to remove any products that aren't profitable.
sometimes it's hard to be honest with ourselves about what products just aren't working.
rank your products for profitability.
check how much each product costs to make, market, and move.
there might be a few products which aren't worth the effort you're putting into them.
this exercise also gives you a clear picture of what products are doing well.
as a small business, it's unlikely that you've saturated your market.
it's almost always easier to push a product that's already working rather than designing something new.
when it does come to introducing new products, you should use a product brief to test the idea.
new ideas are exciting and it can be tempting to throw yourself into them head first.
but remember our wind tunnel.
it's dangerous to find out our fantastic new wings are not so fantastic when they're already in the air.
a design brief is a practicality check for a new product.
it should ask questions about the target markets, potential competition, and financials.
doing this early can save you from investing in products that won't work.
but it will also highlight exciting improvements and innovations to build on in the future.
remember, your marketing and sales engines might be pushing the plane, but your products are the wings that keep you in the air.
your body.
your body - overhead and operations#
overhead and operations.
every overhead cost for your business adds weight to the body of your plane.
if the plane's too heavy, it's going to crash.
for most businesses, the biggest overhead is probably your labor.
don't panic.
keeping your labor costs down doesn't always mean handing out parachutes.
if your team is aligned in its goals and you streamline your workflow, you can keep your plane airborne without any layoffs.
don noticed that communication started to break down as his business grew.
at one point, he even noticed that someone had spent their entire week working on a project that had been canceled months ago.
no one had told them.
so don introduced five meetings, which ended up improving communication and cut down on time wasted.
once a week, his entire team meets up for an all-staff meeting.
the purpose of this meeting is to align the team with the mission statement, as well as updating everyone about important information and bolstering morale.
directly after this meeting, the leadership team also has a short catch-up.
this helps don unify his business from the top down.
if your business is large enough, you'll begin to develop different departments.
when this happens, introduce a department stand-up meeting.
for don, his department heads hold one each weekday to touch base with their team.
a stand-up meeting should be short.
the point is that it should never last long enough that someone needs to sit down.
everyone in your business should know their role and how it contributes to the economic priorities you've set up in your mission statement.
for this reason, don's team started personal priority speed checks, weekly one-on-one coaching sessions between a team member and their direct supervisor.
at a quarterly review meeting, your team members can also receive more general feedback, as well as outlining expectations around compensation packages.
after implementing these five meetings, don found his revenue grew by more than 20% and profits by almost 30.
all this without a single layoff.
the fuel.
the fuel - cashflow#
cash flow.
every part of your small business is powered by the same fuel.
cash.
there's a reason we call it the financial bottom line.
still, if you've been following the flight plan so far, you should begin to make some money.
the last topic we're going to cover is how you should manage your cash flow.
the most common error that small business owners make is using one account for your personal and business finances.
in fact, you'll want five separate accounts for you and your business.
an operating account, a personal account, a profit account, a tax account, and finally, an investment account.
an operating account is where money flows in and out of your business.
any revenue is put into this account, and bills or salaries are paid out of it.
set yourself a fixed salary if you haven't already, and pay yourself into the personal account.
it's important to mentally separate the money which is yours and the money which is fueling your business.
now, set a high watermark for your operating account.
this is an amount of money enough to weather the largest payment you'll have to make in a month.
for instance, if your payroll is around $25k a month, you'll probably want your operating account to stay above $35k.
when you hit payday, you'll always be able to clear that money.
any excess in your high watermark should be split evenly between profit and tax accounts.
you want to establish a rainy day fund, and ensure you have money set aside for when tax time rolls around.
if you find your operating account is running low, move money backwards.
between these three accounts, your plane will always have enough fuel to circle the runway a few times if it needs to.
when business is booming, you might notice that your profit account is pretty full.
time to set a high watermark for this account too.
it should be around 6 times whatever your operating account's watermark is.
any excess can be moved into a final account, your investment account.
these are your profits, and you can do with them what you want.
but, as the name suggests, investing this money is probably a good idea.
so, that was our chapter to how to grow your small business, a 6-part strategy to help your business take off, by donald miller.
final summary#
Conclusion
the key takeaway is this.
watching your small business grow and take off can be an incredible experience.
but it's difficult to make decisions that support that growth.
you shouldn't need to compromise on quality or service.
following this small business flight plan will help you stay in the game.
and the small business flight plan will help you stay in the air, whatever the weather.
don't feel pressured to do everything that we've covered all at once.
working through your flight plan can take time, and you should do it in whatever order that makes sense to you.
even small improvements can make a huge difference.
just remember the six parts of your plane.
the leadership from the cockpit.
the twin engines of marketing and sales.
the wings of your product offerings.
the body with its overhead and operating costs.
and finally, the cash flow fueling the entire thing.
all of them are necessary, and need to be scaled relative to each other.
by using this visual metaphor, you'll build an intuition for your business growth that will continue to guide you as you soar into the clouds.
congratulations, you're cleared for takeoff.
thanks so much for listening.
if you have a moment, leave us a review.
we always appreciate your feedback.
and i'll see you at the next chapter.
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