Most business owners hope to achieve fast levels of growth. However, businesses that enjoy exponential growth tend to follow a framework of intentionally planning to achieve systematic growth, by diagnosing areas of their business that they must work on and identifying specific activities that can accelerate business growth.
Entrepreneur, CEO and elite business coach Andrew Laurie presented a keynote at the recent ANZ Channel Community Meeting in Sydney, sharing his insights on growing your vendor or managed service provider business intentionally.
Laurie identified specific opportunities within each of the primary business activities that commonly contribute to the fastest levels of growth. These business activities included the fundamental operation of the business, the choice of business model(s) and the development of core assets. He also discussed some of the attributes of leaders of the fastest growing businesses.
Nurturing the Fundamentals
When building a business, there are a few key activities that, while not standard to every business, act as triggers for fast levels of growth. Exponentially-growing businesses tend to take a very specific approach to the four fundamental elements of developing a business:
- Controls and clear direction
Your business must be clear on what it’s trying to achieve and have appropriate controls in place over the business. The fastest-growing businesses often have a purpose and/or vision that is sufficiently compelling to attract staff, customers, partners and even funding.
- Robust sales and marketing
The fastest-growing businesses invest aggressively in buying customers. They understand the value of a lifetime customer and invest heavily in marketing to attract them. This is among the most effective ways to grow your company as lifetime customers deliver higher value than one-time customers and can quickly accelerate your business growth. Once you understand the value of your customers and, from that, your allowable acquisition cost, you can invest heavily in buying as many of those customers as you can find.
- Systematised business
Implement a culture and a set of processes within your business that ensure you fail fast, and fail enough. The fastest-growing companies fail fast, receive feedback well, and then iterate. The businesses that do this best are systematically innovative and make sure their culture and processes allow them to continue doing this regularly to learn and grow.
- Strong employee value proposition
Every business needs to recruit well, manage well, and maintain its culture. Often, the fastest-growing businesses are considered to be career accelerants and can measure their employee value proposition by the proportion of employees that sought the business out themselves versus responding to an advertised role. You need to attract and retain talent if you want to grow at the fastest rates so becoming a talent-magnet is a good idea!
To achieve exponential growth, you can’t simply focus on the fundamentals of your business. You must engage the right business models to open up the best avenues for growth. Business owners should invest time to explore different business models to determine the most appropriate model/s that work best for their business.
There are many options for business owners looking to select a business model. Often, where the business’s usual activity will create some growth, adding a better business model or multiple models can multiply business growth and hence improve the overall value of the company. Spending time to understand the different features of different business models is extremely valuable to a business.
Four of the key factors to consider when considering business models:
- Operating leverage
Business models differ in terms of the operating leverage they have. If you, as a business owner, insist on doing everything yourself, your business will be slow to grow. However, if you decide to franchise, for example, your business can grow much faster because it will receive an injection of both time and money from franchisees.
Different business models offer varying rates of scalability. For example, if your business develops apps, you can sell them very quickly and in large numbers, which can accelerate your business growth. Conversely, if you develop or renovate properties, your business is less scalable due to capital constraints and the fact that there is only one buyer for each property, so growth is slower.
You must also consider marketability when evaluating business models. You must determine how big the market is and whether promoting and selling the next sale is easier, faster and cheaper than the one before, as this is a key indicator of a fast-growing business.
- Degree of openness
Many of the fastest-growing businesses have very open business models and leverage the growth of others, so you can benefit from by involving other people and organisations to help grow your business. As a business owner, you can measure how much of your business growth, as a proportion per year, is driven by other organisations. This might be through alliances, through partnerships, through loyalty program relationships or through various other open business models.
A business’s core assets are the things you own or control that are at the heart of how you make money and, importantly, at the heart of your company value. Core assets can be anything from a brand to a machine, intellectual property or even an internal process.
If your core asset is valuable and unique, you’ll make more money out of your business. The quality of your core asset is the single biggest determinant of the value of your company and the most time-efficient way to grow that value.
Innovating your core assets is the fastest way to increase the value of your company, and to do this you should start by priming your mind and that of your team to enable you all to pursue creative thinking and come up with new ideas to innovate your core asset. After evaluating your existing core assets, there are some thirty different ways to innovate new or improved core assets. Examples of those ways provided by Laurie included:
- Identify external trends
You need to identify the significant external trends that affect your business from an industry and market perspective. The fastest-growing businesses position their products around future trends, so it’s important to analyse the trends that impact your business and project what they may look like in 10 years, then design your next product around that outcome.
- Compare your products and services to substitutes
Consider what the substitutes for your business are and use them to innovate your core assets. For example, Southwest Airlines compared the airline industry to the bus industry in order to identify what was, at the time, a completely different set of core assets to any other airline. How can you mirror or copy elements of substitutes to your product or service?
Leaders of the fastest-growing companies spend lots of time on the important activities that have a significant impact on the long-term value of their company. A business rarely grows beyond its leader, so you must invest time to develop your own skills and knowledge. The amount of time you spend on your personal growth will either be a constraint or an enabler to your business growth, so make sure it’s an enabler. To quote the great John Wooden, “It’s what you learn after you think you know it all that counts.”
Take responsibility as a business owner because the fastest levels of growth can’t be achieved without the right person. It is those managing and leading it who, in the end, own the level and speed of growth of a business.
Through intentional planning and systematic organisation, your business can achieve fast growth from different methods. While you can drive incremental growth from your business fundamentals, investing in business model and core asset innovation is often where you’ll multiply the speed of business growth and the overall value of the business. It’s essential that you take a reflective approach to look within your business and diagnose where you can improve.