How do you measure business success? Many people will argue for profitability. It is, after all, the main reason for going into business. However, using that definition automatically excludes it as a metric. Why? Simple. Profitability is not a guarantee but a minimum expectation. A more expedient measurement of success would be business growth.
Growth means more customers, more products, and even more opportunities. Once a company is up and running, business growth will determine its path towards profitability. However, growth also means more challenges.
Growing the business entails devoting enough time and resources to future plans. The alternative option of spending money to maintain the status quo is unsustainable. Outside forces like competition, inflation, and purchasing trends can turn around profitability quickly. This is why business growth is a better determinant of success.
Many companies, unfortunately, struggle to devote enough time to plan for growth. There are certain areas that require constant attention. Ignoring these, or marking them as low priority, may lead to disastrous consequences. On the other hand, some tasks are better delegated to someone else.
In this post, we’ll unpack five areas that, left unaddressed, can prevent owners from experiencing massive business growth. See if you can identify which ones are actually preventing your company from taking the proverbial next step towards your journey to success.
Task 1: Staying Abreast of The Market
Business owners should always be aware of what’s going on in the market. Ignoring market trends can prove costly and sometimes fatal. This is especially true for companies whose products have reached a certain level of maturity. As a result, consumers will look for the next best thing or follow the next best trend. Take the pandemic for example. COVID-19 triggered lockdowns and shutdowns and many restaurants and retail stores survived only because they embraced eCommerce.
By offering online ordering, pickup, and delivery, these businesses managed to stay afloat while others were sinking. Those who were not agile enough to adapt to the changes floundered and were forced found to shut their stores permanently. According to the Wall Street Journal, around 200,000 businesses shut down during the first year of COVID-19.
One of the best examples of not heeding trending market practices happened before the pandemic. In 2017, Toys R Us (the toy behemoth with over 700 stores across the world) suddenly filed for bankruptcy protection. Despite the global footprint of Toys R Us stores, they didn’t embrace an online strategy. As a result, the rise of e-commerce sites where customers can order, pay, and have toys delivered to their homes gobbled up a huge chunk of their business.
Toys R Us has learned a harsh lesson and is now making a comeback of sorts. It’s has partnered with Macy’s and will open 400 toy outlets inside existing Macy’s stores and has two online sites where customers can order online.
Task 2: Money Matters... A Lot
Businesses live or die on finances. No matter how good your idea is, if you don't secure the requisite financial backing, your dreams won’t gain market traction. Instead, they’ll perish on the R&D floor.
Many startups often hit this dilemma: Limited funding but massive expectations. As a result, they either get investors to pump in money in exchange for a piece of the business or cut corners to make it to the next round. However, there’s always a middle ground to keep your business hopes alive without pawning them too much.
Approximately, nine out of ten startups fail, with two closing down within the first year of business. A good chunk of startup failures (16%) attribute their demise to financial issues – Funding dried up as investors shied from putting up more capital, products stuck in development, sales not coming in as anticipated.
Having a firm grasp of money management can help reduce sleepless nights. Setting spending priorities, reducing overhead costs, and consolidating debts are some of the better ways of maintaining control of finances.
Reducing costs can help extend the lifespan of your capital. For example, the ideal business setup can wait until business growth is achieved. Having your own corporate building, premium employment perks, and generous incentives... All these will happen when the time is right.
Task 3: Multitasking Robs You of Productivity
While multitasking is often seen as a great trait that can help companies stay competitive during difficult times, it can also lead to inefficiencies. For every business guru that extols the virtue of multitasking, there’s this counter gem from famous British motoring journalist and host Jeremy Clarkson who has defined multitasking as “the ability to screw everything up simultaneously.”
Research shows that multitasking reduces productivity by as much as 40% and robs businesses of the limited supply of attention their people have every day. In fact, according to Curt Steinhorst, multitasking defeats the “application of focused intelligence for which we hire the best and the brightest in the first place.”
The technology-driven world we live in that relies on how fast information travels often requires multitasking skills. The question is: Is it really efficient to do things yourself when somebody needs to clean the mess later? While multitasking works to some extent, the long-term view requires unloading some of the work to a capable understudy or staff. If finances are tight, outsourcing might be a viable option so you can delegate administrative or routine tasks, saving on wages, equipment, and office space. Having expert partners handle back-office operations such as HR, accounting, IT support, and customer service can take a big weight off your shoulders and give you more time to focus on how to move the company forward.
Task 4: Keeping Up With Technology
As the Toys R Us example clearly demonstrates, not keeping up with tech trends can cut down your market share, fast. A move to digital can spell the difference between retaining relevance or fading into obscurity.
A good example here would be Kodak, a company whose name is synonymous with all things photography. Even Gen-Z knows what having a “Kodak moment” means, even if they probably have no idea how to load a roll of film into an old-school camera.
Ironically, and despite Kodak’s notorious refusal to shift to digital photography, it actually helped develop the technology for digital cameras. Despite investing billions in technology to develop cameras used in mobile phones and other devices, Kodak refused to create a line of digital cameras themselves. Crazy right? Their primary reason was thinking that shifting to digital meant abandoning its bread-and-butter film business and thus foregoing its market advantage.
Had Kodak realized that its market was inevitably trending toward digital, it could have maintained its standing as the top supplier for all things photography. In 2012, Kodak filed for bankruptcy. As for digital photography, it’s now a $110 billion market with no end in sight as far as growth is concerned. How’s that for a picture?
The big take-away? Businesses that are asleep at the wheel usually fall victim to shifting trends and consumer preferences and demands. Not keeping track can be a rude awakening and in an instant your business model or the entire operation is obsolete. Opportunities for business growth usually show up via changes in the market. So, keep your antennas up, because here, what you don’t know can definitely hurt you.
Task 5: Not Abandoning A Failed Business Strategy
Nobody enjoys having to admit to failure. Whether in relationships or businesses, failure is a tacit acknowledgment that perhaps the ‘I’m not good enough.’ However, the longer one refuses to recognize a failing situation, the more severe the damages that inevitably follow.
In businesses, especially startups, continuing with a failed strategy can be very costly. Not only does it burn limited funding, but it also delays profitability, and of course, growth. While we all have that world-class idea that we won’t let go without a fight, sometimes things don’t pan out as they should or as we hoped they would.
Perhaps the market and customers are not yet ready for something that’s too ground-breaking. Let’s take a bite of a famous example. Apple introduced the Newton personal digital assistant in 1992. Features included touchscreen technology, a contacts directory, calendar management, and handwriting to text conversion. It could even send fax wirelessly.
As this was happening in the early ‘90s, these were jaw-dropping features, right? Well, not quite. Despite the hype, Apple managed to sell only 50,000 Newtons in its first three months with the company expecting to sell a million within a year of launch. It ran on three AAA batteries, the handwriting recognition software was bad, and the memory capacity was a scant 140kb. On top of it all, it was way too expensive at $600. Critics had a field day.
Apple CEO Steve Jobs (mercifully) killed the Newton experiment in 1997, four years after its introduction. But crucially, some of the technology used in developing the Newton rebounded dramatically in the form of the original iPod and ultimately, the first iPhone. The rest, as they say, is history.
Failure Is Expensive, So Accept It Early
If everybody had a war chest similar to Apple’s, strategy or product failures wouldn’t be a problem. However, since many companies don’t have the luxury of that level of funding, learning to deal with failure is a safer bet. More importantly, budding entrepreneurs should realize that failure is not necessarily a bad thing. Like Apple’s Newton, it could just be that an idea is way ahead of its time.
At the very least, accepting failure early gives you the opportunity to start over quickly. It also prevents your company from investing any more resources on something that doesn’t or wouldn’t work out anyway. It can point you in the right direction and the sooner you can get working on a better approach, the quicker you can get back on track.
Focusing on The Big Picture Can Help With Your Business Growth Plans
Growing a business means readying your company ready for an eventual larger role. However, running a business requires a thousand small tasks that can overwhelm even the most dedicated founder. In many cases, unloading some of the more minor aspects can free up time and resources to develop plans to set your business up for growth.
Adding more employees is an ideal solution to keep the business running. However, the company’s financial health may not be able to sustain a large payroll and accompanying overheads. In this case, outsourcing many of your company’s non-core competencies can help lighten the workload without breaking the bank.
Business growth means addressing challenges that surface along the way. Instead of spending all your energy putting out fires, wouldn’t you rather dedicate a large part of your day developing the next few stages of the company’s path to profitability and growth?
Let Helpware manage your workload by assisting with the back-office operations of your company. This way, you can devote more of your time developing plans and programs to make your business ready to take on new challenges.
Chat with the Helpware team today. We’ll help with shouldering the load, you focus on growing your business.