Avoiding the stagnation trap

Growing a business is almost as difficult as starting one.? An initially steep growth curve can be followed by a levelling off.? Business owners may then experiment with different strategies to reignite growth, which might be successful or may just cause them take their eyes off the ball. Fine judgement and acceptance of increased risk is required to decide how much time and resources to spend on growth strategies.? In most cases, departing from core activities does not grow a business and may result in the opposite effect. ?

Diving deep?

Are there more reliable ways of growing revenue and profit?? The answer is yes, though there is no quick fix.? The alternative approach is to examine and improve existing processes within the business.? A comprehensive review of every aspect of operations – from the business plan (if there is one) through to credit control – will yield both hard data and identify significant gaps.? Virtually every area will be eligible for at least some improvement, with this also making the business better prepared for organic growth. ???

To be effective, the review must be objective and dispassionate.? This can be a challenge for the owner in whose image the business has been created and there may be a temptation to attribute poor performance to external factors.? This is why the most effective approach may be to give the job to a third party.? An experienced business consultant can perform a detailed diagnostic to identify the bottlenecks and constraints which generate cost and avoidable risk. ?

Being close to the action, many of these problems will be invisible to the owner.? But fixing them will generate a far greater return than the consultant’s fees.? The small business that wants to become a medium-sized business must first adopt the systems and operating processes of the bigger business.?

The time for action?

The next step is to first address those areas which are both important and urgent. ?This is also the time to revisit the overall strategy to see if it aligns with the owner’s personal plans.? Action is needed to put new systems and tactical changes into effect, and to measure the effects of these changes.?

The implementation stage raises further challenges.? In general, change can make employees anxious. Many are instinctively resistant and suspicious.? Employees require security from their job as much as a fair salary and a satisfying role.? Minor administrative changes can be irritating but tolerable – ‘I don’t get paid extra to learn new systems’ - radical change though can be upsetting and disruptive.????

Bumps in the road?

A good team ethic where colleagues respect and, perhaps, even like each other, should, of course, be preserved.? But change can create new tensions even between the best of teammates and make it more difficult to implement.? The solution, again, may be to engage third party assistance.?

An experienced consultant can provide an outside view as well advice and support.? They are unaffected by personal relationships and should have previous experience handling delicate situations such as these.? As a disinterested third party, the consultant can also take some of the heat off the owner. Twelve months down the line when the positive outcome is evident, the team will recognise and applaud but, in the moment, they may not relish the disruption.??

It doesn’t have to be like this..?

Reluctance to identify problems and make the necessary changes is one of the most common reasons why small businesses remain small.? But it doesn’t have to be this way.? The ambitious owner who wants continuing growth in their business does not have to make and take all the bold decisions on their own.? To reignite the growth of their business they only need make one simple and low risk decision - utilise the experience and expertise of others who have already been there.? ?

Brian Kelly Consulting

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