Business growth starts from the very first day that a business is set up. The product, process and people employed define how the business will grow. The wrong combination of different factors can make or break a business. When you start a business the objective is not only sustenance but also growth as there will always be change in the environment that we are in.
Why a Business needs to grow
1. Change is a Constant
There will always be change, whether it be numerous currency changes like in Zimbabwe, Brexit, trade wars, global warming concerns, labour agreements and such, the point being that there will always be change. For a business to be able to meet these demands of change there must be enough operating capital to create new ventures and make it possible to adopt. If you are surving on just enough it is impossible to meet the the demand of extra requirements.
“Change demand” is met by those who are willing to grow and have the culture of growth in them.
Inflation in itself is the systems way of eliminating those who cannot move with the times. The currency of today is not the currency of yesterday, there is an added element of growth. We might say currency has lost value but it is actually growth expressed in a different form. If we are not growing the business will not survive.
3. Generations change
As much we may not notice it, generational demands require growth to be able to move with the times or ahead of the times. What was applicable all this time can change as generations of technology, economies, health, entertainment, social interactions and consistently changing. The business process of yesterday is not enough for the market of tomorrow. Efficiencies need to be regularly defined in order to be relevant.
There will always be competition in the economic system. Competition actually means “alternative” in business. People who are the ultimate customers for any business will thus be looking to see if the alternative is a better solution to what you offer as a busines. This could mean a question on quality, quantity, packaging, delivery, availability, guarantee of service, touch points and much more. If you are not growing in quality, packaging and all the attributes of a business then you might just lose out on future business.
5. Customer needs
As the customer gets exposed to competition, political and socio-economic changes, their experience can demand new experiences from your business. This in itself becomes a reason for your business to grow. The more the world changes, the more the customer is exposed to new experiences. Your business just like your customer must also go through the same exposures in order to understand the ever changing customer needs. The principle of the business may never change but the packaging of the business service is what changes. The customer is a shopper and shoppers shop around.
How do you grow a business?
If you are looking to grow a business here are a few tips that we have used in growing our own businesses
a) Grow a process that meets a growing customer need
Growing a business for the sake of just growing the business normally will kill the business. Business is the employment of capital to create a return that meets cost and growth. If you grow a business into a venture which does not result in a return to meet cost and growth, your capital will be depleted fast.
Coca cola in order to meet the need for sweet juice resulted in Minute Maid, which in itself is a separate market but in the same population. No flight company expands into a territory or route that does not result in airfares that meet the cost of flying there. Virgin could not have expanded into flying if there was no market for the flights.
Before you make the decision to expand or grow a business one must first calculate the numbers of the market, considering the different elements that will affect sales. Smart questions usually assist to get the answer why we are growing. A business just does not grow it grows to meet a market need.
b) Grow a product range to maximise the market
When wwe wanted to grow its wrestling entertainment product range they simply added NXT, when Marvel wanted to grow from comic books they ventured into movies creating a whole universe of superheroes. It may still be the same product but you maximise it by offering different ranges of the same product to meet different demands.
You don’t always have to create a new product, simply understanding the offerings of your product can create a whole new experience for a segment that was trying to fit itself into your current product. The experience that you offer through your service is like a plane ride, within the same plane is the business class,the economy class, the cargo transport, and the children accompanying section. All this is in the same plane, which when it began it was the experiment to just transport people. Looking at Boeing flights today, we are a long way developed from the simple 1914 first commercial flight from St. Petersburg and Tampa, Fla.
A market can thus exist inside another market. Imagine with Toyota,you have different experiences that are offered, you can be in a Toyota Camry, Toyota RAV4, Toyota Vitz and other forms of cars. When car manufacturing started Henry Ford was making a car and now we make customer experiences. It is no longer the fascination of making a “car concept” but of giving the customer a need satisfaction.
c) Grow Relevant Skills
The danger of growth is the inability of the company to meet demand in change. When skills are first hired they meet the immediate requirements but when customer needs evolve the skills need to evolve. Microsoft through edx are consistently offering and chopping products. The product that you learned on Microsoft five years ago maybe retired today. Today we speak of android phones, but a long time ago BlackBerry was the phone of the elite but now we need new skills to meet with a changed or evolved need of the customer.
A typewriter was the main tool of the office back in the day but now a laptop is a new tool but sooner than later something else will take over. Skills come and go, technology changes to meet needs,Netflix is an example of new skills offsetting old skills when Blockbuster was the business for video rental,movie streaming was thought of as being science fiction and the dreams of delusions. However the skills needed to start and make Netflix work were different from the needs of Blockbuster, the same workforce in Blockbuster could not be transferred to Netflix.
If you decide to grow the business the skills become a revolutionary need. When looking at the BCG matrix,the skills needed for a Star are not the same that are needed for the cash cow, we must always be in an innovative mode.
For a consultancy firm, growing skills can mean the provision of a new product. A firm that grows from audit to forensics skills vastly brings value to it’s image as a versatile firms. In many companies the value of the skills determines the value of the product.
d) Grow technology
This one should be an obvious when growing a business. However the perception of what is technology is what escapes most of us. Technology is not just about computers or electronics but it is a question of HOW.
How do we serve customers so that we maximise and they are satisfied? How do we obtain information, how do we receive money,how do we do refunds, how do we reach our customer,how do we deliver? The answers to these questions being about the technology that we need to be using.
A business such as MacDonalds lives to answer the how question. When it is answered then the service is improved. It is not just about a burger but it is about everything associated with bringing the burger to the customer. Amazon is a technology business but it is mostly a how business. It’s mainstay is created by being able to reach its customers no matter where they are but being able to provide them with solutions to product searches, payment solutions, security worries, shopping alternatives, delivery methods and more.
How Alibaba makes it easy for us to buy from thousands of suppliers has created the diffferentiation between them and the rest. eBay would not exist if it did not answer the technology question. When you grow a business grow the technology to meet the business growth is essential.
Acquisition of a delivery vehicle can be the technology that is needed to grow the business. The bicycle that was used to deliver may no longer have the convenience to meet an increased market. Imagine the “three wheeled feet pedalled” ice cream vehicles in a larger urban setting; these would no longer be Relevant, what would be needed would be an ice cream truck. Growth when not met with the right technology can mean irrecoverable cost to the organisation.
e) Grow the capital
As your business grows the value of the company must grow. Your company worth is about the capital that it has. Capital can have different broad categories of which there are two critical ones to consider in growth.
Customer capital: buying cars, machinery, land and any other forms of fixed capital to shore up your growth model will not mean anything until your customer capital grows as well. What got Facebook it’s capital value is the number of subscribers linked to it. On inception, what gave FaceMash(Facebook) it’s lure for investors was the number of more than 300,000 connected people. That level of customer capital meant that there was potential for the business to grow.
Your capital will determine the confidence of the business to grow.
Financial capital: your ability to finance growth activities is important to meet the business demand to justify your growth. A company that ventures into a new market needs to be able to meet the demands of being in that market. This mean being able to finance specific equipment, office and human resource requirements.
A mining company like Rio Tinto has to have the right customer capital and financing capital to start a new venture in another country. A mining venture can sink 2-3 Billion dollars worth of investment just under five years to realise meaningful return after five years. When growing a company one needs to know the numbers otherwise you end up financing growth which has no return.
f) Grow the vision where it lacks ambition
“computer on every desk and in every home.” , This was Microsoft’s goal at some point in the early 80s, however this vision once it came true in the more developed world people have to think again. At the starting point it may have seemed like a lofty goal or a fools dream however as time went by because of the high standard envisioned the business it became more apparent that the business was trained to grow to meet that vision. If the vision is not set right then growth may never be in the DNA of the business.
Growth makes sense when it can be measured, If a vision does not give a sence of measurement then it is open to interpretation and stagnation. I for one once said at some point I want to be the best consultant in Africa, which sounded good to me. However how does one measure being the best in Africa let alone be the best consultant. It sounded ambitious but lacked merit of implementation because it would remain a point of ambiguity. The moment I changed my goals and described things I could measure that is when I could now achieve real things of substance.
If as a company you want to be the best then perhaps you mean to have the biggest market share or highest revenue figures,this must just come out and be understood by everyone. The mission if it is not understood becomes just a statement on the wall.
Hence the mission which describes how is the complimentary measurement of the journey towards the vision.
g) Grow the time available to grow
Time is the foundational resource that we have or that everyone has. Before the balance sheet grows there is time. Everyone can have 1 millions worth of capital but what a company does with it in 31 days shows who is a winner and who is not. The quality time spent on an hour versus the quality of another is never the same.
True growth is the ability to have the most time dedicated to your products. A sale to a customer is time spent on your product by the client. If you can have two clients and another has 10 clients of quality then there is a big difference in revenue.