Most businesses stall at the level of confidence and competence of the business owner. What typically happens is that we add customers and products (or clients and services) as we grow.
But often what happens is that our business becomes more complex, with a wider range of people and products to deal with. What we don't see so easily is that complexity carries cost, both in terms of cost to serve but also opportunity cost.
The first casualty of complexity is time. We end up being involved in day-to-day stuff, which is all to do with past relationships and activities. And when we run out of time, we run out of energy because we end up with too much to do and too little time to deal with it. And when we're that busy and distracted, we lose our ability to think clearly about where we're trying to get to, so we end up in the trap of running a busy-ness vs. a business.
This vicious circle can be likened to gravity - we're not aware of it operating on us but it constantly constrains us. So how do we escape gravity? Business growth expert Dr Mike Ashby of The Breakthrough Company outlines four pillars:
Get a life
Breaking through gravity requires energy. We can't drive our business to the next level if we're tired. We know what we should do with our diet and exercise regimes, but they're often the first thing that we give away under the pressure of busy-ness. And it's not only our physical health: we need mental energy as well which comes from our relationships and our interests outside of work. They're not things we should do if we have time, they're the things we should take care of first, because they give us the energy to do the important stuff.
What is it that you're trying to achieve? If you're not clear about this, you won't be clear about your priorities. And if you're not clear about your priorities, you'll spray your time and energy across the paddock rather than achieving the most important things which drive growth.
Here's a guaranteed way to improve your sales and your profitability: get rid of your D class customers. This will free up your time and energy to focus on A class customers; 99 percent of business owners who do this experience more profit, more revenue and less stress. If this is the only thing you do differently, you'll still shift your business. When we're weighed down by D class customers, products, suppliers, staff and activities, we're compounding the effect of gravity.
Owning a business is lonely. You don't have to do this on your own. The very first help you should get is a PA who can take care of your lower value activities, freeing you up to grow the business. Again, this is an absolutely guaranteed strategy.
The second area of help is advisers. Someone who can provide detached advice and guidance, enabling you and encouraging you to get to the next level. Start with your accountant: if you can't imagine them on your board, you need to change your accountant.
Growth companies create scaffolding for their business, a structure that exists outside of their business which they can stand on as they build their company.
This post originally appeared on the Hayes Knight website
Idealog has been covering the most interesting people, businesses and issues from the fields of innovation, design, technology and urban development for over 12 years. And we're asking for your support so we can keep telling those stories, inspire more entrepreneurs to start their own businesses and keep pushing New Zealand forward. Give over $5 a month and you will not only be supporting New Zealand innovation, but you’ll also receive a print subscription and a copy of the new book by David Downs and Dr. Michelle Dickinson, No. 8 Recharged (while stocks last).
Idealog is part of ICG. We work with clients like Woolworths New Zealand, All Good, Huffer, Liquorland, Resene, Citta Design, TVNZ, Spark and FCB on their event activations, in-store, in-office or out-of-home signage, content creation and vehicle wraps.