Ask Andi: We’ve hit a growth ceiling – hovering in the same place for a few years now. Can you help us change that? We’ve got great people on board and systems set up. We’re ready to go. Expenses reduced. Steady to low annual profits. Let’s grow. What do we do?
Thoughts of the Day: So you’ve hit the growth ceiling – good for you. You’ve reached a business milestone where you’re asked to make a choice. Grow? Reduce? Stay the same? It’s all about protecting the asset. And the lifestyle. Family, business, life priorities. Business is about stalls and challenges. And facing what seems to be insurmountable.
We’ve hit a growth ceiling
Business owners’ egos, and assets, tend to be very directly tied to the future health of the business. When a business heads into troubled waters, the owners aren’t just dealing with a set of business problems and the price of failure can be devastating. Loss of retirement, debts that have to be repaid, lack of steady income, a sense of failure, concerns about letting employees down, disappointing the people who have helped the business going, loss of standing in the business community, and personal sense of failure.
Owners work hard to get their businesses off the ground, facing big risks and the odds of failure are incredible odds of failure. If they survive the early stages, the challenges of what to do next may seem overwhelming. But, the truth is that only 20% of businesses survive after the first five years, as owners overcome significant obstacles to get the business off the ground.
Oddly, in each 10-year cycle that the business enters, only 1/3 survive, which means that the odds of success don’t change. There is no significant advantage derived from longevity. But at some point, the owner maxes out what they know how to do, how to help the business push forward. That’s when things get can get really dicey.
“Everything you want is on the other side of fear.” – Jack Canfield.
Building a long-haul business that can provide for everyone as the economy and world march forward is essential to the company’s long-term future. At a stall point, it’s important to look outside the company for solutions. Adding new ideas and new practices in areas including sales, marketing and finance can be keys to a bright future.
Unfortunately, many business owners waste time and resources thinking they should be able to figure things out. Their self-reliant, “I can do this myself, I should be able to figure this out” attitude got them this far. They don’t understand why that’s not enough going forward.
They still want the business to have a bright future. They’ve just used up the knowledge they brought to the table. And they need to infuse new ideas and more than they know how to do in order to get the business back on track.
The question is what to try next. It’s about more than just getting the business back in gear. It’s about building a business that can thrive through multiple up and down cycles without depending upon the owner.
Pent up energy doesn’t have to be
Bigger than hiring a key employee missing from the team. Not to disregard it as a useful step. Build a team that learns, grows, and problems solves. That work towards a common set of goals. Meet regularly. Share information. Debate solutions. Work issues. Agree on next steps.
Sounds simple? Yes. And no. No, because 90% of businesses haven’t written their common set of goals to work from. Without goals, the company lacks focus and purpose to streamline.
Without goals, it’s is like shooting arrows without taking aim
There’s no budget or forecast to guide financial decision-making. They lack a clear action plan detailing who has to do what.
Write down, build, and implement systems, so that everyone can follow along. You’ll need sales and marketing plans, a bank plan, employee cross-training, job descriptions, and an organizational chart. Measure and manage progress through written reports. Include key measures, profit ratios, and critical success factors. Spread management across a team of competent executives who represent the interests of finance, sales, marketing, operations, and human resources. It’s about learning to treat the business as a business, rather than the owners’ personal piggy bank.
Looking for a good book? Less Stress and More Profit: How Small Business Owners Can Be Happier Today and Richer Tomorrow, by Simon J. Benn
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