Introduction
In "How to Grow Your Small Business," Donald Miller presents a unique and engaging approach to small business growth. Drawing from his own experiences as the founder of StoryBrand, a marketing business, Miller offers practical advice and strategies for entrepreneurs looking to expand their ventures. The book's central metaphor compares a small business to an airplane, with each part representing a crucial aspect of business operations.
Miller's journey began when he realized that despite having clients and experiencing growth, he was spending more time dealing with problems than focusing on his passion: creating content for customers. This realization led him to develop a comprehensive model for small business growth, which he shares in this book.
The Airplane Metaphor
At the heart of Miller's approach is the airplane metaphor. He breaks down a small business into six essential components, each corresponding to a part of an airplane:
- Cockpit - Leadership
- Wings - Product
- Right Engine - Marketing
- Left Engine - Sales
- Body - Overhead and Operations
- Fuel - Cashflow
This metaphor serves as a framework for understanding how different aspects of a business work together and how to maintain balance as the company grows.
The Cockpit: Leadership
The cockpit represents the leadership team of a small business. Just as a pilot needs to know the destination before takeoff, business leaders must have a clear vision of where they want their company to go.
The Importance of a Mission Statement
Miller emphasizes the need for a well-crafted mission statement. Unlike vague, forgettable statements often found on company websites, an effective mission statement should be specific and actionable. It should invite team members to be part of a compelling story where they play a crucial role.
Components of an Effective Mission Statement
Specific Goals: Set three measurable economic objectives that your team can rally around. Specificity gives your team clear targets to aim for.
Deadline: Include a fixed timeline, ideally no longer than two years. This creates a sense of urgency and motivation.
Purpose: Explain why achieving these goals matters. This provides context and meaning to your mission.
Example of a Strong Mission Statement
"We will increase our subscriber base by 30 thousand, the number of advertisers by 30 percent, and our average client investment to $21 thousand within two years. Because good journalism can change the country."
This example clearly illustrates the three key components: specific goals, a timeline, and a purpose.
Implementing Your Mission Statement
Once you've crafted your mission statement, make it a central part of your company culture:
- Display it prominently in the office
- Read it at meetings
- Celebrate when you update or achieve your mission
By keeping your mission statement at the forefront, you ensure that your team always knows where the "plane" is headed.
The Right Engine: Marketing
Marketing is crucial for propelling your business forward. Miller challenges the common belief that successful marketing is all about brand aesthetics. Instead, he advocates for a storytelling approach that puts the customer at the center.
The Customer as the Hero
In your marketing narrative, position your customer as the hero of their own story. Your product or service should be presented as the tool they need to overcome their challenges.
Your Role as the Guide
Cast your business in the role of a trusted guide – like Gandalf or Yoda in popular stories. You're there to provide the knowledge and resources the hero (your customer) needs to succeed.
The Three-Step Plan
Offer your customers a clear, simple path to solving their problem:
- Identify the customer's essential problem
- Present your product as the solution
- Outline 3-4 easy steps for the customer to acquire and use your product
The Call to Action
End your marketing message with a strong, direct call to action. Use imperative language like "Buy now" or "Schedule an appointment." People are more likely to act when explicitly invited to do so.
Example of Effective Storytelling in Marketing
Here's how a hotel booking service might apply this strategy:
"Organizing a holiday can be stressful. You'd rather be relaxing on the beach, not worrying about schedules. That's why we've taken the stress out of booking your hotel. It's easy! Simply choose your destination, find the best deals, and let us sweat the details. Book with us now!"
This short text encapsulates the problem, solution, three-step plan, and call to action.
The Left Engine: Sales
Many business owners feel uncomfortable with sales, fearing they might come across as pushy or manipulative. However, sales are essential for business growth. Miller offers strategies to make sales conversations more natural and effective.
Authentic Sales Conversations
The key to avoiding feeling manipulative is simple: don't be manipulative. Your goal should be to help people solve their problems, not to convince them to buy something they don't need.
Identifying Your Target Audience
Before launching into a sales pitch, ensure you're talking to someone who actually needs your product or service. This approach helps you avoid wasting time and maintains your integrity.
The Sales Pitch as a Story
Structure your sales pitch like a story:
- Identify the problem
- Present your solution
- Outline a simple plan
- Provide a call to action
Example of a Natural Sales Conversation
Imagine a seamstress at a party:
Seamstress: "Have you ever bought clothes online, and when they arrive they don't sit right? I adjust my client's clothes to fit perfectly, so they always look their best."
If the person expresses interest:
Seamstress: "I do the first sizing for free. Then I can adjust any clothes you want done, and store your measurements, so it's quick and easy next time. If you're interested in trying it, I have an hour free on Friday."
This approach feels more like a helpful conversation than a pushy sales pitch.
The Wings: Product
Your products are what keep your business "in the air." As you grow, it's crucial to continuously evaluate and optimize your product offerings.
Evaluating Product Profitability
Regularly assess which products are profitable and which aren't. This may involve some tough decisions:
- Rank your products based on profitability
- Calculate the costs associated with making, marketing, and distributing each product
- Identify products that aren't worth the effort they require
Focusing on Successful Products
It's often easier to push a product that's already working well rather than creating something entirely new. As a small business, you likely haven't saturated your market with your successful products yet.
Introducing New Products
When considering new products, use a Product Brief to test the idea before investing too much time and resources. This brief should address:
- Target markets
- Potential competition
- Financial projections
This process can save you from investing in products that won't work while highlighting opportunities for improvements and innovations.
The Body: Overhead and Operations
Every cost in your business adds "weight" to your plane. If it becomes too heavy, it risks crashing. Labor costs are often the most significant overhead for small businesses.
Streamlining Communication
As businesses grow, communication can break down. Miller suggests implementing five key meetings to improve communication and efficiency:
All-Staff Meeting (weekly): Align the team with the mission statement, share important information, and boost morale.
Leadership Team Meeting (weekly): A short catch-up for the leadership team following the all-staff meeting.
Department Stand-Up Meeting (daily): A brief check-in for each department to touch base and align priorities.
Personal Priority Speed Checks (weekly): One-on-one coaching sessions between team members and their direct supervisors.
Quarterly Review Meeting: Provide general feedback and discuss compensation expectations.
Aligning Roles with Economic Priorities
Ensure every team member understands their role and how it contributes to the company's economic goals as outlined in the mission statement.
Results of Improved Communication
After implementing these meeting structures, Miller's company saw significant growth:
- Revenue increased by over 20%
- Profits grew by almost 30%
Importantly, these improvements were achieved without any layoffs.
The Fuel: Cashflow
Cash is the fuel that powers every aspect of your small business. Proper management of cashflow is crucial for sustainable growth.
Separating Personal and Business Finances
One common mistake small business owners make is mixing personal and business finances. Miller recommends setting up five separate accounts:
- Operating Account: For business revenue and expenses
- Personal Account: For your salary
- Profit Account: For savings and unexpected expenses
- Tax Account: For setting aside money for taxes
- Investment Account: For excess profits to be invested
Managing the Operating Account
Set a "high-water mark" for your Operating Account – an amount that covers your largest monthly expenses (e.g., payroll). Any excess above this mark should be split between the Profit and Tax accounts.
Building a Rainy Day Fund
The Profit Account serves as a buffer for unexpected expenses or slow periods. Set a high-water mark for this account too, typically around six times your Operating Account's mark.
Investing Excess Profits
When your Profit Account exceeds its high-water mark, move the excess to your Investment Account. This money can be used for personal investments or reinvested in the business.
Final Thoughts
Growing a small business is a challenging but rewarding journey. Miller's Small Business Flight Plan provides a comprehensive framework for making decisions that support sustainable growth without compromising on quality or service.
Key takeaways from the book include:
- Develop a clear, actionable mission statement to guide your team
- Use storytelling in your marketing to engage customers
- Approach sales conversations authentically and helpfully
- Regularly evaluate and optimize your product offerings
- Implement effective communication structures as you grow
- Manage your cashflow carefully, separating personal and business finances
Remember, you don't need to implement all these strategies at once. Even small improvements can make a significant difference in your business's performance.
By visualizing your business as an airplane, with each component playing a crucial role, you can develop an intuition for balanced growth. This metaphor will continue to guide you as your business soars to new heights.
Miller's approach offers a fresh perspective on small business growth, combining practical advice with an engaging narrative structure. Whether you're just starting out or looking to take your established small business to the next level, "How to Grow Your Small Business" provides valuable insights and strategies for success.
As you apply these principles to your own business, remember that growth is a journey, not a destination. Stay focused on your mission, keep your customers at the center of your story, and continually refine your operations. With Miller's Flight Plan as your guide, you're well-equipped to navigate the challenges of small business growth and achieve long-term success.