Not all growth is created equal–the ideal type is accelerated, high-margin, manageable growth. How can you achieve this? What Is Driving Your Growth Strategy?
When it comes to growing your business, remember that not all growth is created equal—some types of growth are far superior. The ideal type is accelerated, high-margin, manageable growth. But for many companies, the type of growth they experience only has one or two of these three characteristics:
- Accelerated, high-margin but unmanageable growth will lead to bankruptcy.
- Accelerated, low-margin, manageable growth will have you spinning your wheels and leave you vulnerable if you lose just a few customers.
- Slow, high-margin, manageable growth will leave you open to faster competitors taking market share away from you.
- Slow, low-margin, unmanageable growth means you shouldn’t be in business.
So how do you achieve the ideal type of growth?
Evaluate stakeholders
Growth doesn’t happen in a vacuum. It requires the willing participation of new customers, existing customers, suppliers, financial backers, employees and others. As a business owner you need to evaluate the readiness of each stakeholder for the adoption of your growth plans. If you are in a low margin business, then it’s going to be very difficult to achieve high margin growth without some radical changes to your core offering.
If your employees don’t have the proper training to execute at a faster pace, then you need to get them ready before you decide to ramp up your operations. If you don’t have financing in place to fulfill a significant increase in customer orders, then it won’t do you much good to launch an aggressive sales strategy. Evaluate each stakeholder and determine their readiness for your plan.
Decide if markets or customers will drive your growth
Sometimes your individual customers aren’t aligned with long-term industry trends. They may cling to outdated technologies which they happily buy from you because it’s familiar to them and it gets the job done at good price. If you only cater to the needs of your particular clients, then you may be missing out on larger industry-wide trends that will define your long-term growth.
You have to make a decision as to who will drive your future growth. This could mean having to educate your existing customers on the merits of new technologies. That takes time and effort. You may have to make the difficult decision to fire your existing customers and focus on the longer term opportunities which may be larger and more profitable.
Have realistic milestones
Accelerated growth doesn’t happen overnight. It’s a long-term process requiring the cooperation of many stakeholders. Don’t try to get too much done right away. Just because you have a plan for controlled growth doesn’t mean you will execute it successfully. Typically your first milestone should be to develop a growth plan. This is followed by department-level tactical plans for achieving the growth. Once you have realistic plans in place at a department level start ramping up your growth in stages. Your measures for growth should have three dimensions: number of customers, number of units and dollar sales.
