Every small business needs a well-thought growth strategy. What has worked in the past will not necessarily carry your organization to future levels of success. Much like the character of Ebenezer Scrooge in Charles Dickens’ Christmas classic, business leaders need to evaluate their past strategies and current trajectory in order to avoid an unpleasant future outcome.
Here’s a startling statistic: 86 percent of companies that were on the Fortune 500 in 1955 no longer exist today, according to a recent CNBC Make It article. While there’s a natural rise and fall to a brand’s marketshare, wise entrepreneurs will carefully strategize their growth from a small business to a mid-sized organization and beyond.
We can’t say that those Fortune 500 extinctions were all the result of poor planning. There’s leadership, technology and a host of other factors to consider for why a brand’s popularity may plummet. However, we know that growth strategies need continual reevaluation. In the 1970s, for instance, it was all about mergers and acquisitions to gain marketshare. However, by the late 1980s, many conglomerates were breaking up in favor of breaking into new technologies more rapidly. It’s important to stay on top of market trends and adjust growth strategies.
Today, there are numerous business strategies to consider — 22 to be exact, according to “The Profit Zone” by Adrian Slywotzky, Bob Andelman and David Morrison, which examines the strategies of the world’s most influential business leaders. This means there’s no “one size fits all” strategy for growth. You need to identify the best strategy for your unique business.
One thing is certain: a successful growth strategy is the product of careful planning.
Entrepreneurs need to chart a well defined course to guide business decisions. A growth plan will help business owners minimize their risks, uncover opportunities and avoid common pitfalls, such as failing to delegate responsibilities.
Successful growth strategy begins with an accurate assessment of your business’ strengths, weaknesses and opportunities. Know your competition, and know the things which set you apart. A good way to gauge how you’re doing is to ask your existing clients for feedback. Ask how your company can improve. What new products or services would your clients like you to provide?
One caveat. Be careful not to hasten toward every growth opportunity you find. Ensure you’re employing “smart growth.” Consider whether it’s the right path for your business, and protect your profit margins.
A strong mission statement should guide your decision making. Is it time to reevaluate yours? Avoid flowery statements containing buzzwords and jargon while lacking specificity. The goal of a mission statement is to let your employees and business partners know exactly, yet concisely, what your business is all about. These core values will also inform your decisions about growth opportunities.
Many studies confirm the rate of business failure is accelerating. A study conducted by Olin Business School at Washington University in St. Louis projects that 40 percent of the current Fortune 500 companies won’t be around 10 years from now. Will your business follow that grim forecast, or will you, like Scrooge, redirect your course and make the adjustments needed for a prosperous future?
Be sure your growth plan includes a vision for the future. Where do you want to be in three years? Five years? 20 years? Create an action plan to achieve this vision. And make sure all key players in your organization are on board. Doing things the way you’ve always done them rarely results in sustained growth.
While maintaining consistent quality standards is important, a willingness to adapt to market trends is equally vital. You probably created a business plan in the beginning; review it on a regular basis. Investors and clients will want to see a business plan that’s up-to-date. This critical document should define what’s going to happen and when; who’s responsible for what; and what’s expected for sales, expenses and cash. This requires continual analysis and adjustment to ensure you are still on course for desired growth.
If the Ghost of Business Past is threatening to haunt your future growth, there’s no time like the present to make adjustments. Contact the professionals at Brink Results today to start implementing business solutions for maximized growth and profitability.