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Switzer's top tips to grow your business

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Many businesses want to grow their business, but don’t know how or where to start. Here are some tips to consider.

When to grow

Your business might be just the right size for what you need for now. Growing a business is never easy. But Richard Shrapnel, Business Planning Director at Pitcher Partners, says all businesses need to consider whether to grow. But he advises "don’t think size alone, think strength.”

Normally when you say ‘growth’, people think more sales, bigger premises, more staff, let’s get bigger and bigger. But in actual fact, Shrapnel says that growth is not that. Growth involves growing the strength of the business, its competencies, its capabilities, the way in which it performs in the market. At the end of the day, you want your profit to be higher, and most of us want a better lifestyle, while increasing sales might actually do the opposite. So growth is important, but you must think what it is you need to grow to make your business more successful. You must focus on strengthening your business.

Wary of growth

All businesses go through periods of strength and weakness. They also go through periods when it’s good to expand, and periods when you just need to settle back and relax, and permit yourself to consolidate what you’ve achieved. This is so you’re not always trying to climb the next Mount Everest. It’s important to balance that.

Size is important but not in the way we generally think. Richard Shrapnel says size does not mean bigger, so biggest is not best.

Shrapnel believes that there’s an optimum size – the right size for a business. And that means the number of employees, the volume of activity that takes place, and even just the physical size of the business. Optimum size is when you can still maintain strong unity between everyone, as well as a strong focus and purpose. Once you feel that fragmenting, it’s time to look at the need to divide up your business.

A mature market is one that has grown to a size where it’s got nowhere to go. Unfortunately that’s giving us the incorrect notion and makes us think the wrong way about our businesses. There’s a saying that goes: there are no mature markets, there are only tired companies. The important message that comes with that is that you get companies that can no longer innovate or identify new opportunities, and they can’t find a new future for themselves. They’re tired and they’re worn out. If you find an industry that is very profitable, it’s profitable because it’s filled with companies that are very innovative and active. So mature markets, no. Tired, worn out companies, probably yes.

Growth means continual renewal and thinking about where we’re going, why we’re going, and how we’re going there.

It doesn’t matter whether your business is large, or whether you’re a one-man or one-woman show. It doesn’t matter if you’re even just conceiving what your business might be. Continuous growth is important and it comes back to the way you design your business, the culture you create, and it really comes back to the way you think about your business.

How to expand

Many small businesses ask how they can expand. Shrapnel says it comes back to the way you view your business. It also comes back to knowing what you’re very good at – what’s the strength, the core of my business? Understanding what you do well forms a foundation from which you can progressively grow. Find what you do well and progressively begin to expand that. Then focus on your customers. Ask what they need, not today, but tomorrow, next week, next year, in five years’ time, and work towards meeting their needs. This will grow a substantial business for you.

Shrapnel says you need to take a step back. We often think of growth as increasing sales. But growth is increasing the strength of the business. And quite often you need to adopt cost-reduction measures. And that step back can be a period of rest, where you do these things:

  • Leave the sales alone.
  • Look internally.
  • Improve your efficiencies.
  • Get your systems working properly.
  • Focus on your customer service.
  • Look at the money you’re spending and whether you need to spend it.

So a period of contraction is, in fact, a period of stabilisation and strengthening. And that’s important in any business at any time.

How to grow a business

Shrapnel says that joint ventures, alliances and acquisitions are always one of the first things people think about – these are an external method of growing. And you need to be careful of that – the success rate’s not good. More than 75 per cent fail. And the reason why they fail is generally because people don’t recognise why they’re going into it. Quite often the reason is, because it’ll make them feel more important, they’ll have a bigger business. You should seek alliances or joint ventures if you want to build your competitive strength, or if you want to seek to learn more about your business and yourself, and to acquire new sets of skills. If you go into an alliance, or if you go into a joint venture, and you have a clear focus of what your objective is, it will be successful.

All the studies have shown a loss of that focus. And you do it to acquire skills you don’t have, or to give yourself a temporary advantage, which you otherwise don’t have, in the market. So when you think about your business, and when you think about growing your business, think in terms of continual renewal of the business’s strength – I want to grow my business to make my business stronger, more profitable. Assuming sales, employing more people, expanding the business premises is more of an outcome and not what we should be focusing on.

So, if you’re looking to work on your business rather than being stuck in it, book in for a complimentary business assessment today with Switzer Business Coaching

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

 

Published on: Monday, May 10, 2010

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