BUSINESS GROWTH: Why Most Businesses Stop Growing… And What You Can Do About It

Perhaps one of the least talked about issues when it comes to business growth, is WHY businesses STOP growing, or why they never reach their full potential. Understanding why this happens is the best deterrent to ensure it doesn’t occur in your business. But be warned, you may be surprised by what you’re about to discover.

Over the last 8 years we’ve had access to the inner workings of over 300,000 businesses all over the world. It’s this understanding combined with having directly worked with thousands of businesses directly over the last 20 years or so, that has enabled us to clearly assess the key elements that prevent business growth. In many respects, this could be the most important article you ever read.

The Business Growth Roller-Coaster

To understand why business growth slows or stagnates in any business, we first need to look at how a typical business evolves and why the frustration starts to mount as this growth slows. We call this the ‘Business Growth Roller-Coaster’.

Take a look at this illustration…

business growth roller-coaster

The starting point is the beginning of a business, usually created by a sole proprietor or a small partnership/directorship. Typically, the owners are very hands-on at this stage with few, if any, staff and modest resources. In the early months and years the business grows very well.

Customers receive a high degree of director attention with high levels of expertise and customer-care as a result. Costs in the modest operation are relatively low and the business can respond quickly to customer and market needs.

Word is spread by customers and referrers about the great, cost-effective products or services and new business is easily gained. Business growth is good. The business quickly expands to a peak at point A, driven by the personalities and skills of its owners.

In an ideal world, two conditions will now be met. Firstly, the directors will recognise that they have reached the pinnacle for a personality-driven business and secondly, the business and financial performance will be at a level that completely satisfies them.

In reality, neither is the case.

What happens in the real world is that the owners continue to drive forward and grow the business. However, with business growth... problems materialise…

Staff and resource levels have been increased to serve the growing customer base, increasing costs and tying up director time.

The owners themselves come under increasing time pressure, being torn between customer, staff and business needs. Falling service levels and rising costs see the business growth constricted and dissatisfaction around the business materialises.

Have you ever heard yourself or a colleague say, “This was so much easier in the early days!”

Now the owners find themselves at point C. Right now, you are likely to be at some point between the start of the curve, A and C.

Reality has dawned and the business is at a crossroads.

Do you remain a personality-driven business and attempt to claw your way back to point A by downsizing, culling customers and laying off staff and try and raise 'back' to point A to a higher point?

Or, do you undertake the investment (mostly in time and effort) required to move forward and become a systems-based business at point B. I guess since you're reading this business growth article, it’s highly likely this is what you want to achieve.

Interestingly both types of business can be successful with the right planning, management and marketing. But, too many businesses find themselves falling into the trough in between simply because they didn’t consider early enough what their fundamental strategies and goals should be.

Instead emphasis is placed on the process functions of the business like, delivering the product or service and support to customers and essential marketing and management of the business is overlooked. Growth, as a result, is limited.

The 3 Business Growth Components

Let’s look then at the high-level view of your business (which can be any business). As I mentioned earlier, it has three key components…

1. Process
The mechanics by which any business ‘produces’ its saleable products or services. This is how you generate income.

2. Marketing
The generation of new customers, the retention of existing customers and the maximisation of customer value. This is how you acquire and retain customers and this course focuses on this particular component.

3. Management
The running of the business – its performance management, strategies and goals and financial analysis. This is where you generate profit and wealth.

business growth components

Business Growth Cycle - When Things Are Going Well

When a business is growing steadily and reaching the owner-managers’ objectives, the 3 functions work together to create a harmonious cycle…

Business Growth Diagram - Good Cycle

In reality, the majority of people in business are taught process skills from school days, through skills training and onwards. We are taught how to read and write. How to follow instructions and answer questions. How to replicate what we learn. You develop expertise in how to do ‘things’.

In other words, your expertise and skills invariably lie in the PROCESS function. Consequently, with the skills and knowledge loaded towards the Process function, businesses can only grow whilst there is capacity within the Process function to do so.

Business Growth Cycle - When Things Go Bad

But without the same relative development in the management and in particular marketing functions either side, growth becomes limited.

The cycle now starts to look very different…

Business Growth Diagram - Bad Cycle

The Business Growth Solution

So the solution is simple…

You need to start putting more effort into the management and more importantly the marketing functions of the business to realign the balance.

This doesn’t mean you neglect the process function. It just means you work smarter and allocate your time and effort better to include these two crucial areas of your business.

So, there is little doubt as to why most businesses do not achieve the business growth objectives the directors or partners have set and why now is the time to make the transition from a process-led business to a management- and, in particular, a marketing-led business.

My goal is for you to have a systems-based business that’s set up to achieve your business growth objectives. It’s easy to say that excelling in sales and marketing will solve all your major business challenges. That has some element of truth of course, but if you don’t also concentrate on the ‘process’ and ‘management’ elements of your business, you’ll find your business growth plateaus, no matter how good your sales and marketing is.

To find out how to once and for all 'fix' your business growth and your sales and marketing... you can get my book titled, 'The FORMULA' for FREE (click here). Plus, register for FREE to my live 'FORMULA' webinar, which runs every Thursday. You can register for the webinar here. You can also read more about The FORMULA here.

Amazing Content

 

Steve Hackney is CEO of The Core Asset, best-selling author, and renown business growth expert. Over 26,000 small and medium sized businesses are working with The Core Asset to quickly multiply their sales and profits, transforming their businesses and their lives.

About The Author

Steve Hackney

Steve Hackney is CEO of The Core Asset, best-selling author, and renown business growth expert. Over 26,000 small and medium sized businesses are working with The Core Asset to quickly multiply their sales and profits, transforming their businesses and their lives.

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