Why do some companies grow, while others flounder? Learn how to leap over the growth wall in 2016.
As you grow, challenges will become larger. These challenges appear as growth walls. Thus, hitting a growth wall is a phase where operations reach out-of-control proportions: cash tightens, revenues flatten, and key employees may leave.
What follow are 10 common impediments to sustained growth, and the keys to clearing the hurdles of your own growth wall in 2016.
1. Running your business from the field. While this business strategy might work when you start out, and keeps the profit in your pocket, it won’t be long before this shortsighted approach impedes your ability to see and manage the bigger picture. FIX IT: Get off of the street, ASAP! Running a thriving, progressive, sustainable, growth-oriented business is a full-time job. It’s imperative that you devote the time necessary to plan and manage growth.
2. Failure to delegate. Stagnate companies almost always have difficulty assigning tasks to subordinates for a number of reasons, including lack of trust and a “nobody-can-do-it-like-I-do” philosophy. FIX IT: Delegate! Successful delegation requires assigning the right task to the right person, providing clear and concise communication, and providing supervision.
3. Unwillingness to hire hard and fire easy. Most small companies do a poor job of screening and interviewing employees, which is a recipe for high turnover. Keeping underperformers or problem employees on the payroll for too long also has a negative impact on growth. FIX IT: Hire hard, fire easy. Hiring the right people is critical for sustaining growth. Screen thoroughly and interview intensely. Employees are your most valuable assets. At the other end of the spectrum is the termination process. Do not accept mediocrity. Keeping mediocre (or worse) employees will hamper growth. (Editor’s Note: See p.62 for improving your hiring strategies.)
4. Inadequate advertising budget. An insufficient advertising budget can be directly linked to revenue inertia. Being overly circumspect in this area is a prescription for stagnation. FIX IT: Link your advertising budget to projected revenue growth. There’s a direct link between the amount you invest in advertising and your growth rate. Most companies base their budget on the last year’s revenue. Growth-oriented companies use the coming year’s projected growth. I suggest a budget of approximately 8 percent.
5. Failure to invest. Lack of adequate capitalization will strangle a company’s ability to grow. Keep enough reserve cash on hand to invest in your future. FIX IT: Invest in growth. According to Warren Buffet, reinvesting is the best way to build wealth. If you are a business owner, reinvesting is crucial to your company’s growth and success. According to Buffet, “It does not have to be all of your profits, but a significant amount of financial resources, when targeted effectively, can dramatically improve your bottom line.” While this sounds counterintuitive, a loan can be an excellent catalyst for overcoming growth walls — when done carefully and in line with a strategic plan for expansion.
6. Inadequate planning. Companies stagnate because they don’t plan for growth. FIX IT: Plan, plan, plan. For the most part, growth should be predictable from year to year. Strategic planning is essential to surmounting growth walls. Progressive companies, large or small, have business and marketing plans.
7. Poor execution. Employee incompetence and lack of follow-through negatively affect growth. FIX IT: Execute and follow-through. Develop systems and processes for how tasks should be accomplished and create internal controls to monitor them.
8. Inadequate tracking. Prudent tracking is important for growth. Without an accurate, in-depth understanding of historical perspectives and how they equate with industry barometers, it’s impossible to create a clear roadmap. FIX IT: Track everything. Income and expenses, marketing and advertising (in and out), leads, close ratios, cancellations, customer behavior, etc., should all be monitored. The more solid data you have, the better your decision-making process will be.
9. Failure to embrace change. The ability to recognize opportunities — and be flexible enough to adapt — is crucial for sustained growth. FIX IT: Change. Managed change can be predictable, and should be your objective. If you accept and embrace change, it will pave your way to the Promised Land of growth.
10. Unwillingness to admit, “I don’t know how to get there from here.” At various revenue levels, different processes and skill sets are required. The knowledge that allowed you to get where you are might not be enough to take you to the next level, thus you continue banging against that wall. FIX IT: Seek outside help. There is no magic trick to traversing the growth wall. Others have done it before you. If you find you can’t do it yourself, get help. There are plenty of experts available to guide you. The cost of not doing anything will far exceed your investment in seeking professional help.
You can reach Harvey Goldglantz, president of Pest Control Marketing Co. and author of Marketing Matters, at email@example.com. His book, Marketing Matters, is available from the PMP bookstore.
Leave A Comment