How To Grow Big
Businesses either grow or die; it is the general rule. It is not possible for a company to stay in one position when the whole market continues to evolve around it. If you can’t grow, your competitors will exploit this gap. Fearing risk, avoiding change, and lacking knowledge are the reasons why some businesses fail to grow and face the same consequences as other failed businesses. If a business can’t grow, it cannot compete with the ever-evolving market around it.
By making the decision to let your business grow, do not think that just because you pump up the revenues, nothing bad can happen. Make sure you plan your business’ growth with great consideration and caution. A lot of businesses that do not carefully prepare for their growth get hit hard by some problems they face in the future. There are some lucky businesses that manage to dodge these problems without preparing much, but mostly unprepared businesses fail to cope. Growth can sometimes become a curse for many businesses. To avoid this, you must clearly analyze the things that you require to support your business’ growth are. Then find out the way to provide that capacity whilst still profiting.
Building a Foundation
You must first understand your current business clearly. Is your business really as healthy as you suppose? Make sure the numbers are accurate. Although balance sheets may look boring to most people, they are what holds your business together. Not having a good grasp of your business’ numbers makes you a gambler and not an entrepreneur. Not having the will to work hard and dig deep for the numbers at this stage will create an environment for failure in the future. Expanding your business like this will not be as profitable in the future. Here are the five components for a growth mindset:
- Be realistic and acknowledge the downsides.
- Ask for advice from those people who have been in this situation.
- Get a strong grasp of real numbers.
- Ask people to find mistakes in your plan.
- Don’t let your reasoning get overshadowed by your enthusiasm.
Big is Good and Bigger is Better
When people pay you for goods and services, you make money. However, there is more to that. Think about the revenues that you calculated before, in every cash-flow stream, which subsets of customers contributed the most revenue. List these subsets of customers and try to find out which attributes are common among these customers. Find out their demographics. Ask yourself, how would you get more customers just like these.
‘Vertical growth’ is when you sell more of the same type of goods to already existing customers. These existing customers might also be looking for upgraded products that would be quite easy to offer for you.
One way of ‘horizontal growth’ is to look for similar customers but in a different area. Another way for horizontal growth is to look for different kinds of customers for your products. You may even discover an untapped market. There is no need for you to choose between vertical or horizontal growth. You can also decide to combine them.
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