Why is consistent, persistent growth so difficult to achieve? One of the most challenging tasks is to ensure your business has sustainable profitable growth. If you were a large listed company you will always be under the pressure of the capital markets. The markets demand that all companies relentlessly seek growth and mercilessly punish those who fail.
Fortunately, as a small / medium business owner you are not subject to that immense pressure. Nevertheless, your focus should always be on growth that is sustainable and profitable and one that increases at your pace.
When your business slows down and makes you uncomfortable, the immediate reaction is to launch a burst of sales activity to increase sales. Which is fine, because that is what 9 out of 10 small business persons would do. But as Jonathan Raymond, Chief Brand Officer of E-Myth states “sustainable growth starts with a shift in focus – from merely closing sales to cultivating them”.
A recent research that covered over 1,700 business owners spanning 83 countries brought out some valuable and actionable insights for small and medium business owners. According to this State of The Business Owner Report sustainable revenue and profit growth did not come about by mere focus on sales and individual marketing tactics, but from a holistic focus on the customer, a clear growth strategy and alignment between metrics and goals.
In times of slowdown of sales (not attributable to the external environment) Jonathan cautions against immediately running towards blindly increasing the top line. For, he says, rising sales may be no panacea for what is really ailing the business.
Before you embark on a new and aggressive sales strategy take time to critically examine the insides of your business.
- Are your value and vision statements clearly articulated and disseminated across your organization?
- Are your front-line employees dis-engaged to a point where their dissatisfaction impairs the quality of customer service that repels customers?
- Is the production process broken leading to quality and supply issues?
- Is the finance function broken as a result of which other parts of the business are choking for want of timely availability of cash?
- Are your internal control procedures robust enough to detect in a timely fashion revenue leakages?
- Is there a wide gap between the employee skills and job requirements that brings inefficiencies to the fore?
The list is endless. But only you can do justice because you know your business, its people, its process and finances so well. So take time to fix these areas before you embark on your aggressive sales strategy to increase sales. There is nothing worse than adding higher volume of sales to antiquated or broken processes and demotivated employees.
One more area of caution is to keep a good track of what is happening outside of your business. As Clayton Christensen, noted professor of strategy at the Harvard Business School, pointed out – even the best run companies have bitten the dust just because they did not keep a keen eye on what was happening in their industry and external environment. New products or services that could look very innocuous today may turn out to be disruptively innovative tomorrow to wipe out your business. Cisco brought Lucent and Nortel to its knees with its disruptive innovation on router technology, Toyota took away a huge swathe of General Motor’s revenues when it introduced the sub-compact segment that GM thought would never grow. Digital cameras introduced by the Japanese wiped out the very blue blooded Kodak…..the list is endless.
So the next time you run into a “sales downturn” do not rush into a frenzy creating new sales strategy. Take a pause and look hard within. Fix the problems before you go aggressive on sales. Keep a keen eye open on the external environment.
At least this way you will not be sucked into the vortex of the Growth Paradox.