So you want to learn how to grow a small business?

Even if you own an online-only, brick and mortar, or hybrid business; you’ll be able to apply these principles to your business model.

Here’s the good news…

You only need to focus on 3 areas for business growth. (Don’t be afraid, there are really only 3!)

You’ll use these 3 focus areas for both products or services.

Are you ready for strategic thinking?

(This comes before tactics like social media or content marketing.)

This definitive guide will help you gain insight to grow your small business.

Here’s what you’ll learn:

  • 3 challenges you’re already facing
  • Your 3-step small business growth plan
  • The most important growth metric

But first, a quick story…

A Conversation With 2 Gurus

I’ve learned that the best way to teach something complex is to break it down into it’s simplest form.

So a few years ago when I looked for a simple formula to convey what a small business owner should solely focus.

Because let’s face it, you as a business owner are bombarded with enough things starving for your immediate attention.

I went searching for advice from one of my business mentors…

Jay Abraham, a world-renowned business consultant.

And I saw he had a conversation with Tony Robbins in the early ’90s.

The point made was made. It’s no longer the better product that wins in today’s competitive world—it’s the better sales and marketing.

From that interview, I heard this gem:

“It doesn’t matter what business you’re in. You either increase the number of customers, increase the unit of sale, or increase the amount of times a customer will buy from you. This is an essential point I drive home in my teachings.” – Jay Abraham

Read the full transcript here.

So in short, don’t expect cliches like “great customer service” or “premium products” to be the drivers of growth.

In the long run, you have to focus on intentionally increasing:

  • Average order value
  • Buyer frequency
  • Customers

Aha! The ABC Formula was born…

So what exactly does it solve?

Small Business Owners Struggle With…

Low (or negative) ROI

Does it cost you more to acquire a customer than the sales value at checkout?

Some small businesses struggle with netting a positive ROI on their marketing efforts because of the cost to acquire a customer online. So just the act of doing business requirements, like advertising, is hurting your bottom line.

Little to no repeat customers

Are you seeing fewer customers returning to purchase again and more frequently?

It costs more to acquire a new customer than to get your previous customers to return. If you only focus on getting new customers, but not keeping your existing, your efforts are ultimately wasted.

Difficulty converting traffic into customers

Is the traffic you’re driving to your website converting into sales?

Running Facebook or Google ads guarantees traffic, but does not guarantee the sale.

Focus on these 3 areas instead…

The 3-Step Business Plan

The ABC Formula is a simple framework to focus your marketing and sales efforts on the only 3 levers that will grow your brand:

  • Average order value (AOV)
  • Buyer frequency
  • Customers

If you can double, triple, or quadruple each, expect 6x, 9x, or 12x growth.

Provided you’re already well positioned and creating a strong brand, these three factors are all you’ll need to focus on.


Because it maximizes your sales value and sales volume; exactly what a successful business needs.

Ie. Your customer lifetime value (LTV) will increase!

This guide will teach you how to implement this small business growth plan…

1. Average Order Value

growing small businesses

Increase the average order value of your customers.

What is average order value (AOV)?

Average order value (AOV) is a key performance indicator (KPI) that measures the average amount spent of every order over a given period of time.

Calculating the AOV presents you with insights on how cost effective your marketing is performing by showing you how much revenue the average customer is bringing in and the amount of products or services they may be buying in a time period.

This is crucial info.

These insights shed light on whether customers are buying multiple items and what products make up the bulk of sales.

So you see the importance…

AOV will drive your decisions for what products or services you offer, how you allocate to advertising budgets, and pricing.

How to calculate average order value (AOV):

Average Order Value = Revenue / Number of Orders

Ex. A customer places orders for three shirts valued at $45, $50, and $70. The AOV is $55.

Pro Tip: It’s best to measure this KPI on a monthly basis.

Why increase AOV:

Increasing average order value brings in more revenue and increases the average value of a customer.

As AOV increases, the amount you’re able to allocate on marketing can also increase. This is important because the more you’re willing to pay to acquire a customer, the more dominance you’ll have over your competitors.

That’s right, I know what you’re thinking…

How can I increase my average order value (AOV)?

How to increase AOV:

So now you know the importance of raising your AOV is. But how do you do it?

From a strategic point of view, it’s important to segment your customers based on low, medium, and high spenders or based on other factors such as types of products.

Based on each segment, target them specifically with some tactical ways to raise AOV:

  • Create various bundles and bulk packages
  • Offer post-purchase upgrades, up-sells, and cross-sells
  • Allow free shipping with a minimum order

Pro Tip: Only test each tactic one at a time to accurately measure results.

2. Buyer Frequency

grow small business

Increase the amount of times your previous customers return to purchase.

What is buyer frequency?

Buyer frequency (also known as customer retention) is the number of times existing customers return to make a purchase.

You already have previous buyers that you worked hard to get…

…why not have them come back again?

It’s important to continue the relationship with your existing customers to nurture them into brand advocates because then they’ll provide word of mouth referrals to your brand.

How to calculate buyer frequency:

Buyer Frequency = Number of Orders / Number of Customers

Ex. Last month you had 2000 orders from 1000 customers. Your buyer frequency equals 2.

Pro Tip: It’s best to measure this KPI on a monthly basis.

Why you want to increase buyer frequency:

Increasing buyer frequency is important because acquiring a new customer is more difficult and expensive than to get an existing customer to repeat a purchase.

Raising frequency of purchase creates brand loyalty and is more cost efficient.

Ready to learn how to increase repeat purchases?

How to increase buyer frequency:

Do you realize the importance of continuing the relationship with your existing customers?

From a strategic point of view, it’s important to segment your customers based on low, medium, and high spenders or based on other factors such as types of products.

Based on each segment, use these specific tactics to raise buyer frequency:

  • Create a membership program that delivers at a predetermined frequency
  • Create a loyalty program with incentives to continue regular purchases
  • Leverage retargeting campaigns that re-engage previous customers

3. Customers

small business growth

Increase your new customers.

What is customer acquisition?

Customer acquisition is the process of leveraging marketing channels to increase sales to attract new customers.

Acquiring new potential customers is a crucial aspect of marketing and the most challenging and costly. Implement a small business conversion funnel in your marketing strategy to so that your efforts don’t go to waste.

So how do we measure this?

How to calculate new customers:

Simple. The amount of new customers each month!

Why you want to increase customers:

All businesses thrive on their ability to acquire a new customer and do it consistently over time. Consider your customer acquisition strategy the main producer that will enhance your ability to increase AOV and Buyer Frequency.

How to increase customers:

While there are plenty of ways to increase your customer base, below are three of the most effective.

  • Create first-time purchase offers to capture the interest of new customers
  • Create special offers once someone completes that first initial purchase
  • Leverage a traffic source (such as Facebook ads) to consistently drive traffic to your website

Build Your Business On This Metric

By now you know how to grow a small business…

The value of the ABC Formula to focus your marketing and sales efforts will be vital for increasing the lifetime value (LTV) of your customers.

The more they’re worth to your brand, the more you’re able to spend to acquire them and profit.


Here’s a quick summary:

Growing a small business is no easy task, but there is a solution for the overwhelming amount of work that sparks growth… the ABC Formula

Grow your business by putting your efforts on increasing:

  • Average order value (AOV) – increase average amount spent on an order
  • Buyer frequency – increase the amount of times a customer returns to purchase again
  • Customers – increase the number of new customers
clarity call