At first glance, the title of this post may seem a bit confusing.
After all, isn’t growing your company the same as growing your profits? Well, maybe yes … and maybe no.
I have friends who have grown the physical size of their company (more staff, more office space) while growing their profits. I’ve also had colleagues who have grown their profits while remaining a one-person shop (I fall in the latter category).
Of course, I’ve also known people who have grown the physical size of their company while their profits tanked.
The question of whether or not you should grow the size of your company is the topic of an upcoming post, but for our purposes here, I share three ways you can grow your profits without adding costly staff and overhead:
1) Strategic Partnerships
The most effective way I’ve been able to grow my profits is through a growing number of strategic partnerships that I’ve built through the years. These partnerships are made up mostly of entrepreneurs like me who specialize in different areas. For example, one partner may specialize in graphic design, while you specialize in strategy and content. The partnership brings together the best of both worlds for you to jointly pitch clients (or for you to bring in the partner on projects that fit.) I currently have a roster of five strategic partners with whom I work on a variety of projects. Not only have these people become great business associates, they’ve become some of my best friends.
I’ve also been able to leverage freelancers from a variety of disciplines to help me serve and grow my clients. In this previous post, I wrote about the benefits of using freelancing Web sites, but I also work with a variety of freelancers whom I’ve met through friends or casual networking. These include designers, writers, ad buyers and virtual assistants. I may only have the need for a graphic designer once every few months, so it’s not cost-effective for me to hire a full-time designer who I’d have to pay during significant “down-time.” These freelancers have other clients, and are more than happy to engage when I have a specific project for them. It’s a win-win.
3) Working from Home or Office Sharing
For the past seven years, I’ve worked from home, and it’s been great. As I wrote in this recent post, there is also a great case for having separate office space. However, in my experience, if you’re a entrepreneur who wants to keep your overhead light — consider shared office space. I highly recommend Regus, which offers a variety of shared office space options. With Regus, you don’t have to worry about furnishing your office, and they also (depending on your package) provide virtual assistant, phone and mail support — and can provide access to their office space at airports and in cities across the world. I also know several people who share office space with their strategic partners. It keeps rent light and helps offset overhead.
As I wrote above, in a future post we’re going to deal with the question of whether or not you should stay small or grow. I’ve decided to keep my businesses small, and the above three tips are the best ways I’ve found to grow my profits, without growing the physical size of my companies.
Do you have any tips you’d like to share? Please leave them in the comments!