3 Ways to Grow Your Revenues (Not Related to Advertising or Spending More Money)

cafe store

Businesses often forget that increasing your revenues means you also increase your expenses. It’s only natural. As your sales go up, so does your cost of goods sold (COGS). For services, that would be your cost of sales. And that’s only considering the variable expenses. We’re not even talking about fixed expenses. At a certain point, this will also increase. But that’s for another time.

In my previous article, I talked about the only formula you need to run your business — also known as the profitability framework. I showed the relationships between profits, revenues, and expenses. Here, I’ll focus on the revenues.

What Are Revenues or Sales

Revenues, or sales, is the product of price and quantity sold over a period of time. Another term for the price is unit price or price/revenue per unit.

Revenue side of the profitability framework

Revenues = Price x Quantity

There are only 3 options to increase your sales:

  1. Increase your price
  2. Increase the quantity sold; or
  3. A combination of both

Those are the only 3 ways you can do so. It’s mathematically impossible to increase your revenues unless they don’t fall under these categories.

How to Increase Revenues

Now, let’s expand the revenue formula further.

breakdown of revenues

On the left side, the primary factor that affects your revenues/sales is your revenue streams. In the previews article, I refer to these as the different segments like customer type, product lines, region/location, etc. On the other side, the primary factor that affects your quantity is the frequency of purchase.

Let’s go through each in detail.

Grow Your Revenues by Having More Revenue Streams

Revenue streams are different channels or areas where you can sell or earn money. Of course, this will be different for every business. Here are a few examples of different revenues streams:

  • Sale of products
  • Income from rent
  • Dividends from investments

In the personal setting, this is oftentimes called income streams.

Answering the question, “where does your income/sales come from?” will help you visualize your revenue streams.

Increase revenues by adding new revenue streams

You can further generalize this into two categories:

  1. Current revenue streams
  2. New revenue streams

Your current revenues streams are where you are currently generating sales. This can be your physical store and your website. Maybe you have a sales team and someone who handles partnerships and resellers. Those are your existing or current revenue streams.

Then, of course, new revenue streams are those channels you haven’t earned from or explored at the moment.

Create a New Revenue Stream

One of the easiest way you can increase your revenues is by creating a new revenue streams. Contrary to popular belief, creating new revenue streams is simple and free in most cases.

Here are a few examples:

New Distribution Channels

For businesses selling physical items, the easiest revenue stream to capitalize on is selling on a new distribution channel. One example that comes to mind is the partnership of SM with Lazada.

Teresita Sy-Coson, daughter and vice chairwoman, said in an interview with Bloomberg, “If we can’t bring them into the store, then go to the house and sell to them.”

This move allowed SM to further increase sales without hiring more people and spending on commercial space — meaning, not having to build another mall.

Looking back now, this move makes sense. Instead of waiting for customers to go to their stores, SM can now sell to people who prefer the convenience of shopping online. Plus, if you factor in the worsening traffic condition in the city, it’s a great strategic move.

But 5 years ago, this was controversial news. Most businesses think that opening up new revenue streams will eat up their current one. While that may be true to some extent, that is not the case the majority of the time.

In fact, that’s what publishers have long said about the book industry.

“Selling eBooks will kill us.”

But that’s not true. After years and years of this talk, physical books still outsell their digital counterparts.

As long as you are providing value to your customers, your new revenue stream will not kill your existing one.

New Payment Options

Clothing retailers have long dreaded selling online. They wrongly think, as others, that this will eat up their current revenue streams. If you look at the US market, a lot of clothing retailers have closed down. This phenomenon has been dubbed as the retail apocalypse. But studies have shown that this demise is more a reflection of that particular retailer than reflecting the industry overall.

And this makes a lot of sense.

Oftentimes, companies who have established a presence and a safe market share become complacent. They fail to innovate. That’s why when new players enter the industry with something simple that every customer has already been asking/expecting, and the big players don’t provide it, they cry foul.

And in the Philippines, one of the earliest challenges faced by eCommerce merchants is the payment options. If you wanted to sell online a few years ago, the easiest would have been using PayPal. The problem was there are still a lot of Filipinos who don’t have a bank account, much more a credit card.

According to the latest research, only an estimated 22.5% of Filipinos have bank accounts. Then some estimates that those who have credit cards range only from 5-10% of the population.

That’s why offering COD or cash-on-delivery opened up a separate revenue stream for eCommerce merchants.

Again, looking back, these moves might look trivial. But a few years ago, these things were all expected by consumers but weren’t provided by businesses. But now, offering online purchases and multiple payment options have become the norm.

These are just some examples of how you can create new revenue streams easily. You just have to know your current situation, your industry, and connecting the two dots together would be easy. If you need help in that, don’t hesitate to let reach out and let me know.

The main takeaway is to focus on delivering value to your customers.

Grow Your Revenues By Focusing on Existing Customers

Now, let’s take a look at the right side of the graphic — the number of units sold.

Increase sales by increasing buying frequency

If looking at revenue streams is the primary factor has an effect on your price, the one that affects the number of units sold is frequency.

Frequency is defined as the number of times a person purchases from you. Here are some names you are most probably familiar with:

  • Once or multiple times
  • One-off payments or recurring payments
  • Single purchase or repeat purchases

Stop Looking for New Customers

This is one of the things I am most baffled about. Statistics show over and over again that it is easier to sell to an existing customer than to a new customer. In fact, the probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is 5-20%.

However, the behaviors of businesses — its salespeople and decision-makers — constantly look for MORE customers. They forget about their existing customers. And this is reflected by poor onboarding/retention processes of businesses and the lack of metrics against retaining them (vs the obsession on customer acquisition).

Think about this for a second.

How many times have you made repeated purchases? Which providers or businesses? And most importantly, why do you keep buying from them?

  1. Your hairstylist/barber
  2. Uber / Grab
  3. Ecommerce — Lazada, Shoppee, Amazon

Of course, this does not hold true for everyone.

But for the majority of us, and most of the time, we repeatedly use them (and pay for it) because of the value that we get out of it. They are familiar and deliver exactly what we are looking for.

I have been going to the same barber for 7+ years now. I also use Uber/Grab because I don’t need to have cash with me (something that I find valuable because I hate queuing in ATMs) and I get a pretty much consistent experience throughout (greeting and confirmation when I get in, asks for destination, doesn’t complain, uses Waze for directions, and just drive). It’s just so much easier.

Yes, there’s an argument for acquiring new customers. But oftentimes, businesses neglect their existing ones. If you have a great retention rate, and continually increasing your average order value, then, by all means, focus on customer acquisition.

But if your business is only selling one-off purchases, especially if your products/services is something that is meant to be used/re-used again, then there’s something wrong.


Every business wants to grow its revenues. I’m sure you do. And knowing what makes up revenues (price and quantity) will help you know where to focus on.

Expanded Revenue Side of the Profitability Framework

Low-hanging fruits are opening up new revenues streams, like using another distribution channel and allowing new payment methods and increasing your repeat purchases.

In other words, focus on your customers.

Stop looking at your competitors. Don’t get distracted by internal issues. Stop worrying about whether this new strategy will work or not. Go out and engage with your customers. Continue adding value to their lives. Listen to what they say that way you can provide the best experience for them. You don’t necessarily have to apply them all, but at least, it will give you insights that you never would have if you don’t ask and listen.

Here’s a quick homework for you:

Peter Drucker once said, “What you cannot measure you cannot manage.”

I’ll leave you with something to think about…

  • To increase the price — create new revenue streams
    • How much of your sales should come from existing customers?
    • What about those from new customers?
    • Are there other markets (location or groups) that your current payment methods are alienating?
  • To increase quantity — increase frequency
    • Do you have a metric for customer retention and / or churn?
    • Do you have dedicated account managers that help your customers find value in your products/services?
    • How much value should they contribute to up-sell / cross-sell business?

Again, I’d love to hear your thoughts on this. And I do hope you find this valuable. Feel free to reach out if you want to discuss this further.

You Can’t Grow Your Business If You Don’t Do This

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Ok, that title was clickbait-ish, but that doesn’t mean this article isn’t accurate.

I’ve spoken to a couple of business owners lately and one recurring theme I hear is that they want to grow their business.

Who doesn’t, right?

But the problem is they want to grow their business — generate new leads and customers and eventually revenues, hire new team members — but don’t want to do the work necessary for that growth.

Here’s a conversation I had with a business owner a few weeks ago.

“I want to grow my current sales by 2x so I can cover my opex [operating expenses].” I then reply with, “I totally understand. Everybody likes more sales, right? What are you currently doing to grow your revenues?”

“Nothing,” the owner replied. “I don’t want to ‘advertise’ yet nor do any marketing activities because I’m afraid if I do so, my current team can’t handle it.”

Let’s step back a little bit. What do you think about the business owner’s answer?

Look, any person who’s not invested in the business — emotionally — will clearly see that there’s a disconnect.

The owner wants to grow the business while doing nothing.

You don’t do anything but the business just keeps growing.

In a perfect world, that’s the dream!

But in reality, that’s just not going to happen.

Growing Your Business Requires Two Things from its Owners

If there’s a magic formula for success, then every business would be successful.

But that’s not always the case.

According to one study, 20% of businesses fail within the first year, 30% on the second year, and 50% of fail within 5 years.

Growing any business means you have to spend more and do more. Let me explain…

1. You will spend more

Accept the fact that you will spend more. Whether that’s for hiring new people, advertising, or other activities like developing your product or buying a bigger inventory to avail of lower prices.

It’s the most basic idea in business (or in investments).

You buy/produce something at a lower price only to sell it at a higher price to achieve profits.

Sales – Expenses = Profits.

The only thing you have to keep in mind is when you spend, you do so with the expectation that the return will be higher than the expense itself.

So, instead of simply thinking that shelling out money is simply an expense, think of it as an investment.

Of course, there are ways to use that money wisely, and we’ll get to that in a minute. But at this point, treat every expense as a learning opportunity.

If the outcome is good, meaning the return is at least equal the expense (breakeven), improve on it so the same activity will lead to a bigger return in the future.

If the outcome is bad, learn from it so you don’t make the same mistakes again. If you don’t learn from it, and do the same thing again, that’s not a wise use of your money and other resources.

2. You will do more

Fact is your business will not grow with status quo.

If you have one store with 10 people, open from 9am – 9pm, how do you expect to grow 10x if you don’t hire more people nor do any marketing activities, nor invest in productivity software and apps, nor open new stores?

You spend more because you do more. You do more because you spend more.

Again, there are better uses of resources (in this case manpower and your time). But the fact remains that in order to grow, you have to do more things.

Don’t expect that your brilliant idea will get you where you want to go. You have to do a lot of experimentation — from testing your main value proposition to the smallest details like CTA copy.

This is actually one of the things I mentioned in my private newsletter (which you can subscribe to here, by the way). I worked with another consultant for a client and it’s been 7 weeks of planning and spreadsheets but nothing is coming out.

How to Grow Your Business Effectively and Efficiently

1. Don’t put all your eggs in one basket

I’m sure you know this already, but you don’t invest everything in that one brilliant idea of yours and leave nothing for yourself or as a fallback.

Now, this isn’t to say that you don’t go “all-in” when you execute on your idea. What I meant by not putting all your eggs in one basket is you have to do this smartly.

If you have a secured full-time job and you have a brilliant idea and want to pursue it, don’t just jump the ship and resign from your day job to focus on your side hustle.

Build out your side hustle first while still working full-time. When you see actual profits coming in — positive cashflow — then that’s the only time you start thinking of resigning from your job.

Not everyone has access to investments like the ones we constantly hear from the news where they got millions to fund their growth.

For normal people like us, we have to rely on how regular businesses survive in the market — earn revenues from customers.

Hustle — that’s the proper term. Work on your side business after your full-time job. Work on the weekends. Once it starts growing, that’s when you consider going at this business full-time.

2. Continuously get market feedback

Having started my own consulting practice, I always tell business owners that the market is the best source of feedback for your business.

Most of the time, business owners want to spend resources building out this awesome product/service without getting feedback from the market.

All they did was casually ask around and thought this idea is perfect. They now want to pour in money to build this thing. New website, hire new team, new company, even. All the works.

While it’s an unfortunate story, a lot of business owners go through this. Especially the ones who are “serial entrepreneurs” and have other working businesses. So, it’s okay for them to lose money.

To them, it’s part of the game.

But for most of us, we can’t afford to lose money.

For most of us, investments towards businesses are entire life savings.

So, what do you do instead?

Don’t rely on assumptions

When you have an idea, there are always underlying assumptions behind it. The biggest one is this: when you put your products/services out there, customers will both want and have the capacity to buy it.

But those are two different things.

And the best approach is to test your assumptions (or hypotheses) using market feedback (yup, not market research).

There are already countless tools and frameworks you can use to do this. And I plan on writing more about them in the future. If you want to receive updates about testing your ideas in the market, you can enter your email here.

For the record, I’m not against asking around. In fact, it’s the first step in market validation. If everyone says it’s a terrible idea, don’t proceed. Move to the next one. But if they say it’s great, you have to go to the next step of validation — are people willing to buy it.

Sample testing: e-commerce store introducing a new product/product line

Here’s a brief example of how you can get early market feedback before spending (wasting) a lot of time and money.

Let’s say you’re an existing e-commerce store and you want to introduce a new product or product line.

There are two ways you can go about this:

  1. Develop it first and go to market
  2. Refine the idea, get feedback
    • if positive, develop it and go to market
    • if negative, scrap it and move on to the next idea

After everything I said so far, you know the correct answer is #2, right?

Here’s how you do it.

And you can do it in two ways:

  1. Ask your existing customers
  2. Ask others

I recommend doing it both ways. First, ask your customers to see if it’s the right idea in the first place. After all, your customers already bought from you so they are most likely to tell you how to improve. You can find your best customers and ask them. Depending on how you define them, it could be any of the following:

  • Top-paying customers (all-time or within a specific period like 6 months)
  • Those who bought from you 6x in the last 12 months, instead of just once

You get the idea. There are more variations you can do here depending on your business.

And if that still isn’t a good benefit, remember that existing customers are easier and costs less to sell to. So, if you include them early on about your journey and plans for the business, they’re more likely to become advocates.

Next, use the information you got from your customers to further refine your idea, then either ask them again, or ask the market — people who don’t know you.

The easiest way to do this is through a survey. Or, if you’re further along the development, you can already ask for pre-orders.

This is the main idea behind Kickstarter. Instead of building your own product upfront, you create a campaign and ask feedback from the market. Based on that, you can go ahead and proceed with it, or move on to the next idea.

Pro tip: Do you advertise on facebook? You can use this same approach of getting market feedback early. What you do is post organically on your page. After some time, check back on the analytics. If it gets more engagement than other posts, that’s what you promote. Why? Because there’s a higher chance of it succeeding and gaining traction. Use this tactic instead of multiple A/B testing variations that will just eat up your budget.

3. Use an iterative implementation approach

This was already implied in the previous section, but it’s worth mentioning it here again.

You don’t need to create elaborate 100+ page business plans no one will read.

But there’s no need to reinvent the wheel as well.

There are tools that you can use that allows you to easily “write down” your business and test it against the market.

For example, a favorite tool of mine is the Business Model Canvas. I use this to easily understand how my clients’ business works. I also use this to plan out new service offerings.

There’s a lot of tools within it — like the value proposition canvas. I particularly like this because it really helps you get in the mindset of your customers. You can download both tools here for free.

Then, to make the process of testing and learning easier, there are also some tools provided and named so sophisticatedly that you won’t forget them — the test card and the learning card.

Here’s a video on how you can use these tools…

Validate Your Ideas with the Test Card
Capture (Customer) Insights and Actions with the Learning Card

So, What Are You Going to Do Next

There is no “right” path for business owners. There is no playbook in the market that allows you to easily navigate your way around. There’s no manual that teaches you how to register your business to finding your first customer to hiring and firing people.

The best you can do is learn from what you’re doing and learn from others. Both the successes and the mistakes.

Growing your business means you will do more and spend more.

As the saying goes, “what got you here won’t get you there.”

Expect a lot of bumps in your journey. But if you continuously test your ideas against the market — those small, unconscious adjustments you make on the wheel — you will reach your destination.

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The Secrets to a Great Career


Results and relationships — these two are the cornerstones of a great career. I learned this from Manager Tools. There are a lot of intricacies that go behind that claim, but essentially one cannot exist without the other.

Having great results can only take you so far. No matter how great you are, when you keep stepping on other people’s shoes or making other people feel inferior, you will not get so far. A time will come where you will reach a dead end.

On the other hand, no amount of schmoozing can make you likable enough to get on top. Yes, you may be liked by everyone, but at some point, you will hear “you’re nice and everyone likes you, but you haven’t done anything extraordinary either.”

One cannot exist without the other. If you want a great career, you need to have results and relationships.