Top ten tips for business growth
Once upon a time a brilliant man, David Molian of Cranfield School of Management shared with me his experience of working with high enterprise achievers and we discussed the difference between those that aspire and those that achieve. Statistics say that very few really achieve as well as they might in business and Enterprise success. This seems hugely wasteful to me and in consideration of the current climate surely we all need to be better achievers and even more focused, drilling down on what makes us the money? A while ago, over a four-year period Cranfield School of Management studied the accounts of 15,000 independent UK businesses with turnovers between £1m and £50m. Fewer than 2% consistently grew sales and profits by 25% and provided a decent return on capital employed. Ouch.
I feel strongly there are nt enough genuinely ambitions leaders willing to make the sacrfices that Enterprise demands and yet they believe they are worth the backing. Ambitious owner-managers whom not only talk the talk but walk the walk of the enormously hard work, the hours of dedication, the needs to relentlessly be positive in order to squeeze our success. I was talking to someone this week regarding the importance of understanding the definition of what is expected in terms of access, basics of availability, performance metrics talked about before an investor invests but everything comes down to the human factor. Does the person driving the company have the energy, the commitment, the genuine desire and honesty to deliver the promise of their passionate claims? Odd things challenge individuals along the way, the journey of enterprise is never straight forward but the following basics found to be skills in the high achievers would be one’s you would do to mark yourselves of 10 on? Then set the framework for getting better, being better and surrounding yourselves with talent?
Lesson 1: You really have to want to grow and when I say grow I mean as a person, a leader and as a company.
Growth does not happen to the half-hearted. It’s the difference between involvement, and commitment. Think back to the last time you had bacon and egg. The chicken was involved, but the pig was definitely committed! I once put my home up as collateral, if push comes to shove are you backing yourself to this level?
Lesson 2: Successful businesses know where they are going and write it down — and not just on the back of an envelope. They have clear plans and well-articulated goals. It took me far to long to do this, the difference was stack when I wrote the plan, build around the plan, stayed agile and evolved to deliver what the customer wanted.
Lesson 3: Don’t diversify too early
Most fast-growth SMEs achieve success through selling more of what they currently do to their existing customers and others who are like them. Do not under-estimate the time needed to put down deep roots. I made this mistake recently and have paid a high price but most things are solvable, sometimes the survival of letting people go, (cutting once and cutting deep), is the best and only way to survive, that’s when you earn your leadership crust.
Lesson 4: Profit is sanity, cash is king.
In the current climate sell profitably. Too many businesses think only in terms of growing sales — and do so at the expense of margins.
Lesson 5: Grow up as an organisation
Just as people mature, so must organisations. Managing growth means implementing the necessary changes to systems, structures and processes. Sadly this means companies sometimes out grow of some people, those whom may have helped the early stage journey. Decision made regarding people and change impact matters hugely and an organisation where the leaders are open, communicate continually and share both the good, the bad and the difficulties, these companies are more likely to thrive and survive.
Lesson 6: Stop solving other people’s problems…
…and/or meddling in jobs you pay others to do. It’s very hard to change one’s behaviour, but often the boss is the biggest impediment preventing the organisation from moving forward. The strategic Entrepreneur questionnaire quickly will define an entrepreneur’s ability to strategise. We need as individuals to know our skills and our weakness. Recently I recognise more and more that the creatives that may have invented and started up a company are the very same people that hold it back as process disciples need to be brough in for scale to work profitably.
Lesson 7: Sooner or later the company will need a leader strategist
A business leader has three basic tasks: to run today’s business; to make today’s business better; and to create a new business for a new tomorrow. Most owner-managers spend nearly all their time running today’s business. The top-performers spend most of their time improving today’s business and creating the business they aspire to become. That’s strategy. I did not even know what the word Strategy meant, certainly did not have one until I put myself through a business education but what I know now is the power of a strategy built on market knowledge, understanding trends in both products and people’s buying behaviours. The opportunity for a business to build a niche positioning in a timely way is rare but game changing.
Lesson 8: Focus on your people
Your team will deliver the results for you — if you explain to them what you want, allow them to get on with it and invest in their future. Early days often I have seen individuals struggle with trusting others to get a job done, without the trust of people we have no chance to scale. Alas, all too often the slow decision maker drives the passion out of those great people that work with them, allow people the freedom to make mistakes and see it as progress, learning, potential to grow.
Lesson 9: Develop yourself, invest in yourself, be kind to yourself.
The single person in the business who can have the most impact is the owner-manager. Keep striving to learn just enough to know how but that does not mean you have know all. Back to lucky 8, good people with the right reporting systems and well communicated strategic intent, these people will, in my experience, delivery surprisingly better than an overstretched, all controlling, leader who has too many plates to spin.
Lesson 10: Work smarter
Working longer and longer hours is most owner-managers’ recipe for success, actually early days when the business is very small in some cases this is right. In fact when all things are equal sometimes this reigns true despite the size? Nevertheless always have a balance, what’s your reset? How hard you work counts for nothing if the numbers do not add up and their often is a better way when many minds meet and make a plan.
So what’s the point? Perhaps take the three areas above where you know only too well yourself and the weaknesses you have. Work with your management team and share the areas in which you plan to grow, learn, need feedback, (sometimes we go to fast to allow that voice of reason from someone around us.)
Then ask them what their three are?
Together be better?
And finally, always, always find someone to praise each day.