When we think of growth, we tend to think of winning new projects and new clients. Another viable strategy is to capture additional revenue from your existing clients. You can add revenue from existing clients by expanding geographically and diversifying services to meet more of their needs. Business licensing is the foundation for capturing this growth.
This strategy has helped many of our clients gain a competitive advantage and build revenue in tightly competitive markets. The capacity for growth is significant: a recent Gallup study confirmed that many businesses are living “from RFP to RFP, where competition is based largely on price,” while maximizing revenues from only 29 percent of their customers.1
A proactive strategy for growth is twofold: align your licensing footprint geographically with those of your existing customers, and license your company to diversify services.
Align Your Licensing Footprint
Do you know where your clients operate, beyond the latest project you completed for them? Do you know the full scope and footprints of their operations? Identifying your clients’ footprints and asking about opportunities beyond your current operating territory can help your firm expand your operations. Once in the new jurisdiction, your experience on that project can serve as a foundation for future growth.
Aligning your licensing footprint is a cost-effective proposition, and getting there ahead of your competitors can give you an edge. Following are average state license fees in a sampling of regulated industries:
- Architecture $195
- Engineering $135
- Construction: $225
- Land Surveying: $130
- Employment: $550
- Pharmacy: $300
- Energy Supplier: $225
- Real Estate: $185
Even with state fees for foreign qualification factored in, you’re still looking at a modest investment to launch operations in a new state compared to the potential revenues presented by such a move, particularly in jurisdictions where you’ve identified potential opportunities.
In addition, firms can build revenue by adding a new line of service. For example, architecture firms have diversified significantly since the recession, adding allied services such as engineering, landscape architecture, interior design, and lighting design. Pharmacies are offering adjunct services such as laboratory testing and immunizations; real estate companies are making forays into land use approvals, property acquisition, and property management. Diversifying allows companies to enhance client relations by providing deeper expertise and developing more comprehensive, innovative solutions. It also makes you a more competitive provider and lets you capture a bigger market share.
Licensing ahead to add a line of service is also a cost-effective strategy. For example, state fees to license a firm for land surveying nationwide total $4,926; to add architecture, $4,245. Compared to the opportunities afforded by a new line of service nationwide, the potential return on investment is clear. In fact, our clients that have employed this strategy routinely experience ROIs of 30X and up, even with costs for outsourced license management included.
The Bottom Line
Building revenues through existing customers has many obvious advantages: It costs less, and is therefore more profitable. It’s easier, since your customers are already identified and on board. And it deepens your customer relations and boosts retention. All of these enhance revenue and growth without relying on a race to the bottom in price to earn new business.
If you would like to capture more opportunities and become a more valuable partner to your clients, get in touch or give us a call, 1-888-995-5895. We’ll be happy to suggest some proactive license strategies and calculate your potential return on investment.
1. “Guide to Customer Centricity: Analytics and Advice for B2B Leaders,” Gallup. Web.