Why do some businesses appear to steam ahead, recording rapid year-on-year growth, when others even in the same sector, with the same market opportunity, lag behind, recording poor growth or often no growth at all.
Of course, every sector will have its own nuances, however there are some barriers to growth that every business owner (and aspiring business owner) will need to address if they aim to punch above their weight.
Often the biggest barrier to a business’s growth is the capability of its leader, particularly when it comes to areas such as their level of ambition or issues like, their ability to handle risk.
We’ve all heard the saying ‘Speculate to accumulate’, and although we would never endorse taking uncalculated risks, or investing in poor ideas or weak market opportunities, it’s no surprise that businesses that are well funded from day one, gain more traction faster than those who fund growth through organic re-investment.
We once again have one of the fastest growing economies in the developed world, funding is available for those who are prepared to find it and who have a solid and backable growth plan.
Of course, funding should never be a substitute for sales growth, however an entrepreneur who considers all debt bad debt, may need to address their understanding of ‘good structured debt’ that facilitates growth.
What do you consider your relationship to be between growing your business and underpinning that potential with capital expenditure?
2. Poor teams
Every successful business owner needs to be prepared to make themselves redundant… so to speak. i.e. take themselves out of the day-to-day operational running of their business. Only once you have recruited and built a high performing team (often more highly qualified than yourself) are you able to then focus solely on strategy and focused business growth.
Attempting to hang on to areas of the business that you perceive can only be done by you, or which you like best – is growth suicide.
In the early stages of a business, a busy entrepreneur has to be disciplined in carving out time in their already overloaded schedule to create a few hours a week of ‘grey time’. Space when you can reflect on your business, your growth potential, finding solutions to your current challenges and time to step back from the day to day operations. (Note: Saturday mornings often work well!)
However, every couple of months, take a look back at your own personal activity, what do you need to delegate or move on, to allow you more time to focus on strategy and growth?
Likewise, as your team grows, they will need to do the same as their roles become narrower and more specialized.
3. Inability to scale sales performance
Once you have solved the first two problems your next challenge in accelerating your business growth is to understand how to scale your lead generation and sales operation, or the part of the business we like to refer to as ‘Your Sales Engine’.
Very often a business reaches a point of growth because an early employee (usually the founder or an early Director) who through their personal passion are able to bring on-board the first round of clients. However, unless you understand how to build a scalable Sales Engine for your business which includes scaling all of the following four areas:
- Sales Strategy
- Sales Team
- Sales Process & Templates
- Sales Technique
Your growth will be limited to the sales potential of one or two members of your existing team and your business with plateau as a result.
How do you currently acquire and win new clients, how can that be documented so the system becomes less people centric and more process centric and therefore able to be duplicated and scaled. You must do this if you want to grow your business. It’s impossible to scale until you are able to scale your Sales Engine!
Ultimately, your recorded Net Profit on your P&L is the very last indicator to your growth, as profit (and cash) have a lag time to materialise in any business. It’s therefore important you find ways to identify barriers to growth as early as possible, either in yourself, your team or your business processes and find ways to address them before they reduce your profit potential.
This guide was written for ByteStart by Lara Morgan of Company Shortcuts.