Critical growth categories are more than profit
By Leanne Hoagland-Smith March 24, 2013 4:38PM
Leanne Hoagland-Smith. | Provided photo~Sun-Times Media
Updated: March 24, 2013 11:46PM
So many times the business growth solutions fall into the “one size fits all” model. This approach ignores the reality of the different business growth stages and consequently the different challenges being faced within each growth stage.
Unfortunately, many of these traditional business growth solutions are revenue- and profit-driven only. These solutions ignore the reality of the internal culture of the people. Without people, no organization will continue to survive and -- more importantly -- thrive.
Recently in reading, “Navigating the Growth Curve,” by James Fischer, I realized that profit will change as the business enters different growth stages and is especially vulnerable during the transition periods. This is where chaos is so evident and why so many businesses become vulnerable. This is probably the key reason why all employees need to know how the company makes and keeps money.
Fischer’s approach to the business growth strategy makes far more sense because it is people driven. The number of employees determines the business stage not the revenue or years in business. This model is 100 percent contrary to traditional business models and yet it makes fare more sense because from my experience people problems always outweigh profit problems. So why not structure your business and your profit around people instead of just revenue?
Within each stage of growth, there are three critical growth goal categories or success factors:
Note: A critical growth category is what is both sufficient and necessary to achieve the current mission of the enterprise and this applies to individuals as well.
Depending upon the stage, the order and priority of these critical success factors will change and should change.
For example, a new business starts out with a focus on profit, then people and process come next. Here revenue growth and consequently profits are very important so that the business can move forward to that next stage. People are also required to get the business moving. Process is necessary, but not as critical to the success of the small business.
In this initial startup business stage, the enterprise faces some of these hurdles:
• Cash flow and limited capital
• Increase sales
No wonder this initial stage of business growth has the highest morality rate.
If your small business is facing some growing pains or is just coasting along, maybe it is best to take a fresh look at where your business is according to the number of people and then determine if all is in alignment. Yes this approach may be somewhat strange and unusual. However if what you have already tried is not working to your satisfaction, then maybe it is time to rethink your business growth strategy. Who knows you may even increase your profits?
P.S. Shout Out – Sophia’s House of Pancakes in Highland and Susie’s Café in Valparaiso are great places for that early business breakfast or lunch.