As a “Lone Ranger”, at some point I was faced with a situation where I reached maximum profitability. We could not have made any further progress without some problems on the organizational side. So I was faced with the challenge of reorganizing the company in order to continue to grow it.
Businesses go through stages in their life cycles that are characterized by fundamental problems and crises. These issues need to be addressed before further growth is possible. Especially small and medium-sized enterprises need to find a strategic and organizational direction here if they are to survive in the market.
In my next article, I will discuss some of the steps I believe are necessary to grow wisely (and without burnout).
Find out how you can grow
A great concept for determining what opportunities exist for a company’s growth is Igor Ansoff’s Product Market Matrix. This indicates the basic direction of market penetration, product development, market development, and diversification (risk distribution).
Your decision should be based on the following aspects:
- If there is still a lot of room for growth for the existing product in the existing market, market penetration should be chosen as it is less risky.
- If you specialize in customer groups rather than products or services, you should be responsible for product development. It requires learning new skills and has greater uncertainty of success than market penetration. So the risk here is greater. However, growth is not limited by existing demand for previous products.
- Market development is finding new target groups for existing products. It also involves a degree of uncertainty as to the likelihood of success, less certain than market penetration. If your product or service is highly specialized, finding new customer groups may be easier than building new skills.
- Risk diversification is the riskiest method because you are entering new territory on both the product and market sides. On the one hand, the risk for the company is reduced, as it allows you to choose the most profitable areas and, if successful, provides a completely independent cash flow.
If I were you, I would just sit down and brainstorm at least five ideas for each area. This will help you understand what the instructions actually mean.
Ideas to grow your business
Here I would like to share some thoughts that I hope will help you develop your own ideas.
Suppose you are alone or have only one or two employees in your company providing a service. Which path can I take?
- Developing special offers for the best customers (product development), i.e. establishing cooperation with hairdressers as personal trainers.
- Developing basic offers to facilitate new customer adoption (product development). In other words, as a financial services provider, we offer small and inexpensive evening training courses.
- Development of information products (online courses, webinars, downloads) for target groups (product development – the advantage here is that there is no hourly rate). That is, if a physical therapist sets up his online resources for exercises.
- Find a very special target group that you have never served before. In some cases, we also make new proposals (market development, diversification). In other words, select your target group of sports clubs as your marketing agency.
- Starting a completely new business (diversification) that has nothing to do with your previous business, in other words, starting an online shop for music equipment as a nail designer.
Decide how you want to grow
Of course, you will have to make a decision at some point based on your ideas. My recommendation is to make a decision and then do nothing for a while. Go about your normal life for a week or two (with this decision in the back of your mind) and let it sink in. If after two weeks you’re still convinced you made the right decision, just keep going.
The reason for this approach is simple. Hasty shots should be avoided. Because the more you follow the direction of changing again, the more difficult and expensive it will be.
If you approach everything seriously and correctly, your decisions will be incorporated into meaningful concepts. It is of course up to you whether you want to develop a complete strategy right away or pursue a few strategic ideas. Either way, the key is finding new customers. That’s why my article “Customer Acquisition – You Don’t Need a Tip, You Need a System” will help you understand from the beginning what a structured path looks like. It’s about developing long-term marketing and sales channels that ensure customer acquisition.
Plan your resources for growth
Whatever you tackle, try to get a concrete idea of what needs to be done. Of course, you don’t need to know all the details. However, you should have a clear understanding of the main problems and a high-level outline of the steps to resolve them.
I recommend: Create a project plan that records the time and budget required for each step. Once that’s done, add it all up.
We’re looking for partners and employees
One of the most important aspects, if not the most important, is finding a partner. The reason is simple.
There are only 24 hours in your day. There are many things you can do on your own, but there are only so many things you can do.
There are two problems that can occur.
- Economic breadwinners take a hit because so much effort goes into building new ones.
- You’re slow to build because you’re not investing enough time because you have to deal with your existing business.
So find someone to support you. There is no best method here. It depends on the example. Maybe you need someone to support your old business in order to jump into a new one. Maybe you need someone to build something new with you. You have to decide that.
Build a system that is easy to work in
This point is more of a recommendation than an actual requirement. I’m assuming you already have a somewhat well-functioning business. In this regard, I would like to propose a bet. Things probably aren’t going smoothly. Honestly, I wonder when that will happen… And further, I think one of the main reasons for this is the fact that things “just happened to be that way” when the company was founded. I am sure.
Please try harder next time. Plan activities that will need to be repeated many times before you perform them. Create checklists and enter work steps on your calendar.
This smells like process management. that’s right. But it’s more efficient.
At some point, we have become accustomed to a certain work logic that involves repetitive tasks. I initially used Trello for this and then switched to MeisterTask. Highly recommended… Here’s a screenshot to show you it in action:
establish control
To see successful growth, especially in the early stages, you need a compass to tell you if you are on the right path. Control does that.
This doesn’t mean you can directly look at your sales and see that not much is happening initially. Rather, you need indicators that your idea is working. Examples include:
- Increase in the number of visitors to your website
- positive feedback from customers
- To find customers in the first place
- Increase response to social media content
- No complaints
- repeating small successes
As you can see, not all points can be measured 100% objectively. However, each point can be set as a reference in advance and observed. That’s the key.
If you need some inspiration on “meaningful metrics” and how to use them, check out my article “Which metrics matter for small businesses?” It’s for you. In it, we will explain in more detail the different types of key indicators and show which ones are important in which situations.
adjust your plan
No plan lasts forever or is a one-size-fits-all plan. That’s why managing countermeasures is so important. Indicates when you need to change your plan.
This is where the well-known logic of the PDCA cycle comes into play: Plan, Do, Check, Act.
It’s a fine line
- Test something long enough to get reliable results,
- Pursuing a path for too long only to fail.
You’re not always right, that’s part of the deal. Often my path is to try a tactic three more times or three more months before abandoning it.
Speaking of tactics… I gave a more precise line of demarcation as to where strategy begins in my article “What is the Difference Between Strategy and Tactics?” What we want to avoid is abandoning directions that make sense in principle.
please take it easy
I included this point because I myself am often too impatient. And I know from my own experience that it almost always takes three years to start a new business or branch and get it running reasonably smoothly.
So please take your time!
Retreat if things don’t work out (preferably defined in advance)
I’m always asked, but should I give up? keep it up! keep it up!
Yes, it’s hard to leave the path you believe in, but I believe it’s necessary.
Let’s say you invest for 2-2.5 years and don’t see any noticeable upward trend in your results. Are you really going to work hard for two more years? Of course, whether it makes sense to give up depends on each individual case. But I’m not convinced that everyone (and always) can succeed “just with enough effort.” I’m a big believer in “try smarter!”
Ideally, you should consider the worst-case exit scenario before you start. Allow for clear measurements. Previously, I personally had the following criteria:
- If I don’t find new customers within a year, I’ll give up.
- If there is no chance that the company will become profitable within six months, I will give up.
- Invest 20,000 euros. Once they’re gone, that’s it.
I’ve always felt that this approach protects me from major damage.
Optimize performance
It’s much better if your plan actually works. Once that happens, focus there and smooth the path. Take your performance to the next level by sanding down corners and edges.
To achieve this, we need to standardize what can be standardized. Your performance must be reliable. Consistency is the magic word.
Optimizing and standardizing performance increases efficiency. That means you can accomplish more or save money.
However, that is the last step. First, you need to find and build something that works. Only then can optimization be possible.
I myself went through this step. As a freelance instructor, at some point I began to standardize my content and teaching methods. It was the biggest time saver I had ever experienced and the biggest liberator for my personal life. As you know, I belong to the “believers”.
In the end, I hope you get some inspiration on how to grow your business. Maybe it was just an idea that came to mind. Perhaps you could have gotten something out of each individual phase.
If you have any questions or would like feedback on an idea, please use the comments. I will reply to you soon.
I would also like to draw your attention to my personal favorite article. “How do you create a small business strategy?” – The complete guide.” I’m sure it all starts here. Many of the mechanisms and tools you need to grow your business come from strategy development. I hope this article is the beginning of your planned (!) success story.