Has Your Small Business Stopped Growing?

Has your small business stopped growing? I might know why.

And more importantly, if it turns out the textbook answer I give is right, the answer suggests concrete steps you can take to restart your growth.

One caution up front though. We need to use a bit of math in the discussion that follows. However, don’t worry. We are not going into the weeds on this one. The following discussion is light reading.

Small Businesses Often Grow Linearly

To start, let me propose that small businesses grow “linearly.” Or we might also say “arithmetically.”

But all that means is, you and I gain customers or clients one at a time.

Further, this arithmetic growth makes sense.

If you think about just one common element of marketing your business—your sign—it may be that every week, a hundred people drive by your business and see your sign.

Then maybe ten of those people call you. And then a subset of those callers sign on and become your customers.

Over the course of a year, this linear or arithmetic growth means you grow your business by, say, 100 customers.

Probably most of the other growth in your small business works the same way.

Web traffic and web advertising grow your business one click at a time. Cold calls you or a salesperson makes grow your business one successful sales call at a time. Conferences and trade shows, well, you get the gist of this.

Small Businesses Shrink Exponentially

Now consider this: Probably you lose customers or clients at some percentage rate. Or we might say probably you lose customers or clients “exponentially.”

Note: You’ve heard of exponential growth. What we’re talking about here is exponential decay.

In other words, if you or I have 100 clients or customers, we might lose ten of these folks. But really, the best way to express that attrition, that “exponential decay,” is as a percentage like 10 percent attrition. Or 10 percent decay.

The percentage by the way reflects the reality that attrition connects to the size of the business.

A business with 100 customers might lose ten people, and that means 10% attrition or decay.

But a similar business with 1,000 customers doesn’t lose just ten people. Probably it too loses some percentage like 10%.

This is all pretty basic. No earth-shattering insight here. No mind-numbing math, thankfully.

All we’ve really talked about is gaining customers or clients at some rate that can expressed best as a steady arithmetic increment (like 100 new customers a year). And then also we’ve talked about losing customers or clients at a steady percentage rate like 10%.

Growth and Decay Eventually Balance

And now we get to the textbook reason some small businesses stop growing.

At the point where the linear growth balances out with the exponential decay, growth stops.

The precise formula? Your or my business stops growing at the point equal to the arithmetic growth divided by the decay rate:

Maximum Customers = Arithmetic Growth / Exponential Decay

With arithmetic growth of 10 clients or customers and an attrition or decay rate of 10 percent, for example, the maximum size of the business equals 100 clients or customers (calculated as 10/.1)

With arithmetic growth of 100 clients or customers and an attrition or decay rate of 10 percent, the maximum equals 1,000 clients or customers (calculated as 100/.1)

Calculating the Theoretical Maximum Revenue

By the way, if you can express your arithmetic growth in dollars, you can use this same formula to calculate the maximum revenue potential of your business.

If your business arithmetically grows by $125,000 a year and your attrition equals 8%, the maximum equals $1,000,000 of revenue (calculated as $125,000/.08).

Key Takeaways from the Calculus of Growth

I promised this blog post would be short and sweet. So let me just throw out a handful of final comments.

First, the clean math described in the preceding paragraphs simplifies stuff a lot. The reality will be more complicated.

Second, the formula described earlier suggests that our company growth will slow over time and even stop eventually. Why? Because if we just keep growing the same way: with signage X people see a day, a website that attracts Y visitors a week, a sales guy making Z sales calls every month, eventually growth and decay balance.

Third, you and I do have a way to continue growing—and that is to grow the way we grow. In other words, more signage, more website traffic, and more sales calls.

Other Resources You Might Find Interesting

If you are interested in other resources for growing your small business, contact us today!  Our experienced consultants and business development specialists can streamline a plan to grow your business.  We offer free consultations both online and in person!


Online Marketing Funnels You Aren’t Using – BUT SHOULD!

An online marketing funnel is a marketing strategy for companies to get a consistent stream of new leads or sales from their website. Most online entrepreneurs should have at least one type of lead or sales funnel in place. However, there are several types of marketing funnels that many online entrepreneurs and business owners are not using.

Here we will go over five online marketing funnels you may not be using right now, but should.

Quiz Funnel

A Quiz Funnel starts with visitors answering a series of compelling questions that promise to provide immediate and personalized feedback. After completing the quiz, they are asked for their contact information to receive their results. BuzzFeed popularized online quizzes and savvy marketers followed their lead.

Depending on the email service used, answers from the quiz can also tag subscribers. This way you can customize email follow-ups. For example, if you run a marketing company, you might decide to segment your emails based on small business owners and agency owners—two very different audiences, but you may have services for each group.

Attention Span Funnel

A Digital Attention Span Funnel is designed to grab the attention of visitors who have short attention spans, and to quickly win their trust and turn them into leads. This particular funnel is different because it is not a dedicated page, but blended into a blog post that’s focused on solving a specific problem for the site’s prospective customers.

To implement this funnel, your first step is letting visitors know you are qualified to solve their problems by using “trust triggers” on your web page. Examples of trust triggers include “As Seen On” publisher logos, testimonials, and incorporating influencers in your content.

Next, your second step is solving visitors’ problems that led them to your content. This is critical to building a trusting relationship. And finally, your third step is leveraging all that trust and turning visitors into leads through content upgrades. Offer an option for a free bonus (downloadable PDF, training video, etc.) that expands on the topic of the blog post. The key here is your content upgrade must clearly tie into the same problem the post is solving.

Hero Funnel

A Hero Funnel’s purpose is to position you as an authority through your background, expertise, and accomplishments, and to ask visitors to opt in to your list and follow you on your social media. This funnel is beneficial for anyone who is the face of their company. Use it on the “About” page on your site, or even use it on a YourName.com type domain. A good example of a Hero Funnel is Russell Brunson, the founder of ClickFunnels.

A Hero Funnel is not going to bring in a high number of subscribers, but the ones who do come from this funnel will be the most interested in you personally. And remember, your goal is not to sell products, or even get visitors to opt in for a free gift. You are selling you, so focus on gaining social media followers and general email subscriptions.

Reverse Squeeze Page Funnel

A Reverse Squeeze Page Funnel gives away some of your best content before asking for a visitor’s email address. For example, if you have a video that explains how to get traffic from LinkedIn, at the end of the video, ask visitors to opt in to see your method to convert that traffic into leads. This funnel works best when you need to overcome trust issues with new visitors because you are giving them value first. In most cases, your conversion rate will be lower than most other opt-in pages, but visitors will trust you more.

Invisible Funnel

In an Invisible Funnel, people opt in with a credit card to attend an event, or get access to a training, software, or digital product, but they aren’t charged immediately. They will have access to the product or service for free at first, and then be billed after they’ve had a chance to use the product or service. It could be three or seven days later—or even a month later. And that’s what makes this funnel so unique.

For example, if you are selling an information product, you might allow people to have three days to review and apply the training, and then charge their credit card, unless they cancel.


Some of these online marketing funnels are easier to implement than others (i.e., the Quiz Funnel would probably require a premium tool or service to implement). But others involve no more than just changing how you position your existing offers.

Don’t jump in and try to execute all of these at once.  Think about which one best suits your business and go with it.  Give it some time to work.  Then try another.

If you need help getting this going please reach out to us at (714) 872-2393 for more information and one of our experienced consultants can assist you.

Things to Consider Before Buying Equipment for Your Small Business

Purchasing equipment for a new business is an important, yet often stressful part of getting ready to launch.  You may be the most confident entrepreneur out there but investing hard-earned capital into fixed assets before you even make your first sales can be a nail-biting experience.  To ensure you make the right purchases, it is essential to comparison shop and carefully assess the LTV (Long-term value) of each piece of equipment.

You have so much at stake when you consider the importance of the equipment you choose.  To help you simplify things, here are a few guidelines to help you in your buying process.  Our clients have seen great results using these 7 tips.  Some may seem simple but can really get you thinking.  If you need assistance please reach out as we would love to assist you.

1. Start with a List

Before you head out to the local supplier and start shopping, it is critical to create a list of your equipment needs and wants.  This list should be part of your business plan and something you continue to update and revise as your business grows and evolves.

The list should be broken into two columns. The first includes a rundown of the essential pieces of equipment that you must have now for basic operations. The second is a “wish list” of items that could help your business but aren’t mandatory. Start by shopping for everything on your must-have list before investing in the extras that you can get once your business is up and rolling.

2. Identify What You Should Outsource

While it may be very convenient to have one of those fancy postal machines to stamp all of your outgoing mail, could you save money and just take items to the post office?  As part of your list of needs and wants, you’ll want to identify what makes sense to outsource for financial reasons and space limitations. You may be able to get by without the industrial coffee machine (just go with the Target or Walmart special), copier or other cumbersome piece of equipment in the near term to cut down on your initial capital investment and to avoid cluttering your workspace.

3. Make a Drawing

Whether you have a salon, restaurant, office or retail business, you need to have accurate measurements of your workspace to help you make smart choices when it comes to what you’ll be buying. That photocopier with all the bells and whistles might seem like a fantastic deal in the office supply store. However, if it’s too big for your office, it’s no bargain!

Carefully measure each area where equipment will be placed and note the ideal dimensions you’ll need. A space planning tool like SmartDraw can be particularly beneficial by enabling you to digitally design your space and drag and draw furniture and fixtures that you need. Having this plan in hand when you start your equipment shopping can help you narrow down your choices and prevent costly mistakes.

4. New or Used?

In a perfect world, you’d purchase all of your business equipment new. However, this isn’t typically possible when you’re working with a limited budget. Just as you listed tasks you could potentially outsource, it is worth your time to carefully assess what you need to buy new and what can be purchased “gently used.”

Keep in mind that you can expect to find savings of at least 25 to 50 percent on used equipment. Often, you can snap up higher quality items than you expected to purchase when you venture away from new equipment dealers and start searching for bargains on used items. Don’t be afraid to go to auctions, liquidation sales, garage sales and online sites to find deals. It can be a great way to slash those initial capital expenditures that can take a significant bite out of your first year’s profits.

5. Choose Quality over Price

Of course, a seemingly good deal on a piece of equipment is no deal at all if it frequently breaks down or doesn’t serve your operational needs. While price is important in deciding what to purchase, the greater focus should be on quality and value.

When it comes to buying equipment for your business, “caveat emptor!” Let the buyer beware. If you find an incredible deal on something you need, take the time to research the model online. Often, you can find reviews on sites like ConsumerReports.org or even retailer sites where customers can provide feedback. By carefully checking out an item before you buy it, you can save yourself a lot of potential headaches down the road.

Additional considerations? You will want to factor in whether or not there is a local provider who can work on the equipment if it needs service or repair. Also, find out if parts are locally available or if they’re being shipped from across the country or overseas.

6. Just Say No to Scrimping on Your Most Important Items

When you’re looking to save on equipment, it’s easy to just go for the lowest price model. In some cases, this strategy works. However, there are those critical items that are worth spending a little extra on to avoid many potential problems.

For those in the restaurant industry, knives, ranges and pots and pans need to be able to produce quality food while withstanding heavy use. Hair salons require top-notch client chairs, lighting and cutting tools. Offices that rely heavily on computers should stick to well-established brands and avoid lesser quality PCs, printers and monitors. And, you deserve to have a high-quality office chair that supports you when you’re tackling the administrative and marketing tasks that will require you to sit at a desk.

7. A Flexible Source of Capital

If you’re like most new business owners, you probably don’t have enough in the bank to cover the cost of all of your equipment needs. Yes, there are small business loans available, but typically, these are not given to new businesses that have yet to establish a track record of success. Credit cards are another option for paying for equipment, but it’s important to consider the interest rate and how long you’ll take to pay back the amount owed.

Another option is to reach out to MCDA’s line of credit options.  We have developed a working relationship with over 30 lenders who specialize in working with small business who are just starting out.  Reach out to us today for a free analysis and we can tell you within 24-48 hours if we can get you funded.  Loans up to 150K.

Starting a new business? Looking to grow an existing business? Free coaching sessions available!

Congratulations! Because of your relationship with MCDA- you and your business are eligible to receive a complimentary coaching session valued at $350.00.  MCDA has some of the best business coaches available.  Our coaches have been featured on CBS, NBC, The New York Times, Wall Street Journal and more!

If you are interested please reach out to us.  We will email you a very quick questionnaire to better pair you with one of our business coaches.  It should take you no longer than 10 minutes to complete this questionnaire. After you complete the questionnaire MCDA will contact you to set up a time to discuss your answers and set you up with a 1 – 2 hour coaching session – giving you practical, easy to implement and proven business strategies that will make a difference in your business straight away.  We offer our sessions in person or via Skype.  We will work with you to make it convenient and less taxing on your schedule.

Whether you are looking for ways to grow the profit in your company or methods to attract high performing team members – we can help!

Perhaps you just want to know how you can attract more new customers or have your existing customers spending more!

Or you might just want the chance to take a well deserved break without worrying about the business when you are gone!

Whatever your goals are MCDA can help. We have helped more than 50,000 business owners just like you throughout the U.S.!