Top ten secrets for small business success - an alternative view
 Mike Clough has put forward his top ten secrets for small business success in 2010. By and large they make for interesting and entirely sensible reading, but his top tip is one I draw issue with.
Tip 1 is "Grow your customer base. Understand your customer demographics and why they buy your products and services. Win clients over with new and diversified products. Offer multiple price points and create packages or customizable plans, which give your customers greater freedom and flexibility."
Great in theory, but in practice it isn't appropriate for all businesses to chase new customers. It can be an expensive business, and it depends entirely where the firm is within its cycle whether this is the right move.
In my experience a business will grow its revenues, profits or customer base, but the three do not always go hand in hand:
increasing the customer base usually means an increase in advertising, discounting and other tactics that may add numbers to the database, but results in a level revenue stream and - of course - lower profits;
increasing revenues tends to involve investing in diversifying so that new products can be offered to existing customers or new markets. Although there can be an increase in customer numbers the result is profits are lost to investment;
increasing profits typically involves cost reductions. Investment in activities that will increase revenues or customer numbers tends to be reduced.
There is, of course, a balancing act to be had here. Business leaders may decide to compromise outright growth in one area to protect a degree of the status quo in another. The key is that these decisions are thought through and considered as part of a strategic plan.
My suggestion is, therefore, simply that this year your target should be to grow your business. Whether that means customer base, profits or revenues (or to which extent you balance the three) should be a thought out business decision.
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