Let’s start the year off right. Whether you are an owner, manager, or advisor, here are five tips for business growth in 2018.
When thinking about business growth, think about getting better, not bigger.
The word “growth” has two definitions: (1) To become bigger; and, (2) To improve, or become better.
All businesses — no matter how large or small — are at their essential core collections of systems and processes. Those processes are: Sales, people, accounting and finance, and operations. And strategy and leadership are systems as well.
More often than not, owners and managers focus on external factors as being their obstacles to growth. For example, they see too much competition as the barrier to more sales. They might respond with aggressive price cutting. Instead, focus on internal factors — such as systems to identify and satisfy unmet customer needs — will do more to profitably increase sales than discounts.
Thus, our first business growth tip: Keep in mind, better produces bigger.
Don’t mistake symptoms for problems.
Too often owners fall prey to mistaking symptoms for problems. The symptom, such as a cash shortage or high employee turnover, inflicts pain.
Owners need to dig deep into the company’s systems to discover root causes of the pain. Cash could be short because of inadequate processes for collecting receivables. Employee turnover could be high because of improper training and counseling of unit managers.
As simple as finding the real cause of a problem sounds, often the quick-fix is pursed. Unless the root cause of problems is identified and addressed, growth potential will not be realized. Owners need to run to — not from — problems, and dig deep for the systemic cause.
- Accounting is your friend, not foe.
Many owners utilize their accounting processes only as much as is necessary to file taxes, satisfy lenders, and know profits or losses. Using accounting processes to their fullest extent can provide powerful tools, which in turn can steer businesses toward growth.
The real power of accounting comes from a robust use of budgets and forecasts to manage the execution of business and strategic plans. And from a sharp analytical look at operations, pointing out hidden opportunities and deficiencies to be addressed.
Take advice from outsiders.
Human nature is such that proximity diminishes objectivity and prospective. Emotional attachments, biases, and prejudgments get in the way of independent, clear thinking.
Increasingly, owners are relying upon informal boards of outside advisors. Or they engage business coaches or consultants. The benefit of this business growth tip: Objective thinking and viewpoints, that often lead the way forward toward growth.
Create a culture of accountability.
The best formed plans and strategy mean little unless they are well-executed. Successful execution requires a culture of accountability. Everyone needs to know and understand what is expected of them. And to be committed to the concept that they agree to deliver on promises made.
To support the culture of accountability, systems and processes must allow for measurement. Remember the old sayings: If you can’t measure it, you can’t manage it.
New Years’ resolutions come and go. But stick by these tips year-round, and your odds of your being on a path to building a more profitable and valuable business 2018 will be increased.