Business self-sustainability resolves many of the challenges faced by the business owner daily. Business sustainability is the strategy of growing your business to the level where you wanted your business to be when you started it.
If you make business self-sustainability as a priority in your business growth planning and staff management, you will notice recommendable positive changes in your business and a decrease in the rate of challenges that are faced.
The benefits of a self-sustaining business:
Let us cover the benefits of the self-sustaining business to understand how business growth strategies help a business to achieve their desired outcome from it:
1: Productize a service
If you start providing the service and package offers to your customers using a proper approach and deliver consistent results more efficiently, it will have a high impact on your business process.
Service is the on-going requirement along with maintenance, so rather than making a single sale to one client, you can present a package where you will get a certain amount from the client every month for the maintenance and services.
You don’t create a monthly service plan for a customer; you create a product for your business, which can be sold to the same client again and again.
2: Maintenance Plans
Some of the features you should look into for your own productized service plans. Have appropriate tools for whatever product your business has to systemize.
It’s not necessary to implement everything you have in mind; sometimes, you can borrow the idea of what you want to offer and what you don’t want to provide in the maintenance plans.
It would be best if you had a TRP of your own, which will set you apart in the market. There are many things you can include like freemium service where you allow the users to use your service with some limitations, or being available 24/7, etc.
3: Mistakes to Avoid
There are existing businesses to research which have already made mistakes in the past to learn. Review your yearly business report to understand the errors that you’ve done in the last year and change them.
Hiring the right people is critical because you need people who can decide on your behalf when you aren’t available in the office. Apart from the skillset in your employees, it would help if you also considered them to be good cultured.
Always keep your focus on the bigger picture, if you spend your time handling day to day tasks like emails which can be managed by someone else, you might lose your concentration from the bigger picture of growing your business.
4: Track Metrics
For a better understanding of how your company is running, going through numbers is very important. It would be best if you did some calculation to find out:
- MRR Monthly Recurring Revenue: MRR calculation tells you how much your customers are paying you for subscriptions each month.
- ARPU Average Revenue Per User: The formula for calculating ARPU is simple, divide the total revenue by the number of subscribers.
- Customer Churn Rate: Also known as the rate of attrition is the rate of users who stopped using your product or unsubscribed. The formula is simple, divide the subscriber at the beginning minus subscribers at the end by subscriber at the beginning.
- Revenue Churn: This is the percentage of revenue you have lost from existing customers. The formula for revenue churn is to divide the net revenue loss from an existing customer in a period of total revenue at the beginning of a period.
- Customer Lifetime Value: This is the metric that shows the entire revenue business requires form an individual customer. For customer lifetime value, you first need to calculate lifetime value using Lifetime Value = Average Value of Sale × Number of Transactions × Retention Time Period. Then calculate Customer lifetime value using
Customer Lifetime Value = Lifetime Value × Profit Margin.
Having a self-sustaining business is having business stress free, and a regular flow of income will grant you financial freedom. The strategies described here may appear intuitively simple, but they need a real struggle and regulation to achieve. So pull up your shocks and start your self-sustaining business today.