Revenue Objectives
All small-business owners have a goal of increasing revenues, but within that primary goal are other objectives that are the building blocks of achieving the desired revenue growth. These revenue-producing objectives are incorporated into the marketing plan section of the company’s business plan. The small-business owner can choose several strategic paths to increase sales. If each strategy succeeds, revenue growth for the small business can be outstanding.
An aggressive revenue objective is to not only increase sales but increase them at a greater rate each year. Being able to achieve this objective is an indication that the marketing strategies implemented by the company are successful. More customers are aware of the company’s products and services, and the conversion rate of customer prospects to paying customers is on the rise. If revenues increased 5 percent in the previous year, for example, the revenue objective for the upcoming year could be 8 percent sales growth.
The market for a company’s products and services can be compared to a pie. In a growing market, the size of the overall pie increases each year -- the total potential revenue for the companies in the market is larger. Building market share means that your company’s share of this revenue pie gets larger each year. Achieving this objective indicates that your strategies are effective in beating out the competition. Your marketing message is resonating with target customers more effectively than your competitors’ messages. You have done a superior job of identifying the product features or benefits that target customers are looking for.
Entering new markets helps further revenue growth objectives, because the total number of customers available to your company will increase. For example, a company that is well established in the Midwest may decide to market its products in the Southeast. Adding distribution channels allows you to reach new markets as well. A small business that offers its products to the retail market through distributors can also market these products directly to consumers through the company’s website.
Your customer base -- those satisfied customers who continue to do business with you -- can be a tremendous asset to help you reach your revenue growth objectives, because they will be willing to purchase new products and services you offer that also meet their needs. Your positive brand image, reputation for quality and excellent customer service will drive sales of products and services you add to the mix you presently offer. Implementing strategies to encourage existing customers to purchase in larger quantities or more frequently can also spur revenue growth. A popular fine-dining restaurant located in a downtown business district could serve smaller portions of its dinner menu through a food truck business that operates at lunchtime, serving much the same customer groups it does at night.
A small-business owner must avoid limiting his scope when he considers who his target markets could be. Viewing the benefits of his products and services too narrowly may prevent the company from reaching its full potential -- including its revenue objectives. The benefits his company offers may appeal to groups he is not currently doing business with. A management consulting firm that originally focused on helping medical practices improve office efficiency may find that other professional practices -- dentists, attorneys, architects -- need these same services and can be reached through much the same marketing methods the firm uses to market its services to physicians.