Does this sound familiar? You want to grow your company, but you’ve hit a wall. Or maybe you are trying to make your company easier to run but don’t know how. If this sounds familiar, you are not alone… 81% of all business owners feel this way.
We reviewed a recent survey on the growth of privately held businesses in upstate New York with revenues between $5 million and $250 million. Overall, in 2020, these companies saw an average decrease in sales of 4.7%. Some of those companies lost 50% or more of their revenue, while others saw an increase in sales of over 30%.
There is no doubt that the pandemic was a primary culprit for the companies surveyed who lost sales in 2020, but even in the prior years the growth rates were all over the board, ranging from growth of 200% to losses in revenue of 9%. And those numbers only come from companies that reported their results…predictable revenue growth is hard to achieve.
Besides outside economic factors, like the pandemic, there are other reasons that revenue growth is so unpredictable and difficult to sustain. So, what can we as business owners do to beat the odds and achieve predictable and sustainable growth?
The keys to predictable and sustainable growth are more than simply having an awesome sales team. It is much more holistic than that. All aspects of a company must be functioning with the best practices in order to attract and retain quality customers and employees. If your operations, accounting, management, or marketing are not operating properly – it will have a ripple effect on your entire business and its ability to create predictable and sustainable growth. Continually creating and successfully executing a strategic growth plan is the answer.
It starts with an assessment of the entire organization both inside and out, with an evaluation of the competition and how the company ranks within the environment in which it operates. There are a variety of processes and techniques that can be utilized – ranging from a SWOT analysis and Michael Porter’s Five Forces, Blue Ocean’s Four Actions Framework or tools from the Entrepreneurs Operating System. At FAZ we utilize components of each of these but start by looking at what we call the 18 Value Drivers.
The 18 Value Drivers methodology was developed at MIT and utilizes data collected on over 25,000 middle market businesses. The 18 Value Drivers process is a way to look holistically at every corner of a business and compares the data gathered against the best practices utilized in other companies. The process looks at everything from branding and marketing to legal and finances to human resources and operations and beyond.
Before you move forward, you must ask does your company have a Mission and Vision and has it stated its Core Values? These are critical to defining your company’s destination. Where are you going? What do you want to accomplish?
The assessments told us where the company is today, and the Vision provided us with clarity about where we want to go. Now it is time to develop strategies (routes) to get the company from A to B. Most companies develop more strategies than can be executed at one time. There just is not enough time, people or money. It is time to prioritize. What needs to be worked on first? Things to consider when it comes to prioritization include:
- Do we need to fix something that is putting the company at risk?
- Is one of the strategies going to give us more immediate results?
- Can one strategy make a larger positive impact than another?
- Are there things that must be completed prior to embarking on another strategy?
- Do we have the skills, money and time to do some of these?
To answer some of these questions it may require the management team to begin building details into the strategic plan. In fact, building the details is the next step and you may find that as you build out the details that the strategy may not be feasible at this time or you may stumble upon a better strategic approach. The details of the strategies must be framed like any SMART goal. They must be specific, measurable, achievable, realistic, and time bound. You must be able to answer what, why, who, how, and when?
The last step is the most critical. It is the execution. The execution phase includes: working the plan, monitoring what is happening, and modifying the plan as needed. The execution has to be a focal point of the organization’s daily life. It can’t be something that it is picked up at the end of the quarter and dusted off.
This process is a never-ending process. On a regular recurring basis, a company must start over and do a new assessment. It is a company’s commitment to this never-ending process which will build a stronger, more valuable business with predictable and sustainable growth.