If you talk to most business owners about growth in the next year they will tell you they’re expecting 10%, maybe 20% growth over last year.  And for a business that’s been around for a while, that’s a pretty reasonable target to shoot for.

The problem with a 10% target in terms of business strategy is that it doesn’t really stretch you.  More than likely you could handle 10% growth without any significant issues.  Maybe you’ve got extra capacity, maybe you and your team will work just a bit harder.

It’s unlikely that incremental growth like that is really going to require a serious look at how you do things. But plan that kind of growth over a few years and at some point you will be stretched…and at that point because you are at capacity it becomes a lot harder to make changes.

You might hear yourself saying things like:  “We’re so busy, I don’t have time to figure out how to do this a better way.”  or “I can’t afford to put in a new system, process, whatever now – it would be too much impact to our current customers.”.

In fact, by just having reasonable growth over time, you can paint yourself into a corner that’s hard to get out of.  The end result is often working a lot harder, dropping the ball more often and not getting much additional profit despite having a lot more customers.

What if you were going to grow 10X?

Here’s a test that can help you identify the biggest constraints in your business…and hopefully do something about them before it becomes a crisis.

Try this – Imagine your current business is suddenly 10 times larger than it is today.  You’re servicing 10 times the number of customers.  You’re bringing in 10 times the amount of revenue.

Where’s the most likely place you’d stumble?  If you’ve got a physical location – could it support 10 times the amount of traffic?  If not, what could it support compared to where you are today?  What’s the breaking point?

You’d likely need to add employees – what’s the first place you’d feel the pain?  Would it be in creating or delivering your product or service?  Would it be in handling customer calls?  Would it be in terms of just being able to invoice and collect on a much larger volume?  Do you need special skills for some aspect of your business?  A typical example is that the business owner often is the only one who has the skills to do certain things.  If you had 10X the volume how would that kind of work get done?

Would you enjoy being 10X larger?  Maybe that takes you from 5 employees to 50 employees and that was never in your plans.  If that’s the case, how much do you want to grow?  What’s your ‘peak’ size that you can imagine?  What are the impacts if you were at that size?

Remember the purpose of your business is only to give you what you want out of life.

By looking through a different kind of lens – magnifying by 10X, it’s often easier to see where the issues are.  It can also be a good indicator of things that probably need to be fixed today but you’ve let them slide because it’s easy enough to handle them with a brute force approach.

Here’s an example – say it currently takes you, the business owner, 6 hours a week to handle all of your invoicing and bookkeeping.  It’s a pain, but a lot of times you can get it done on a weekend or you just power through it. Multiple by 10 and it’s not even imaginable for you to be doing 60 hours a week of back office stuff.

What would it take to get someone in today who could take over that responsibility for you now?

Your current growth target is fine

There’s no need to change your growth target for this year (although if you don’t have one, you should take the time to make one…and / or we should get together for a meeting…!).  However I am suggesting that you carve out a few hours in the next week or two and take yourself through this exercise.

Look at all aspects of your business and use the process to identify the highest priority of things you could work on now…when everything’s not urgent.  The goal is continued, managed growth and by identifying your biggest constraints it will be much easier to make that growth happen.

What do you think?  Is this a test that you’ve tried before?  What’s your gut feel in terms of where your biggest issue would be?  We’d love to hear your thoughts – share them in the comments below.

Shawn Kinkade    Kansas City Business Coach

Photo by Tattooed JJ via Flickr

This past week I had the opportunity to tour a new dealership location.  It was a bit of a reunion as I had not seen the President or his General Manager in over 7 years.   And though our visit was pretty brief, I was reminded of the hard work it takes to build a business.  More directly, I witnessed first hand many of the attributes that make some businesses successful and others struggle or even worse, fail.

It started with a call 20 minutes before I was to arrive, just to let me know they were paving the parking lot (they’re in the middle of a major construction project) so I would know how and where to park when we arrived.

It reminded me that the little things are important.

After exchanging genuine firm handshakes that let both parties know they are glad to see each other and your time is important; we then toured the new building that is about 30 days from completion.  You could sense the pride from our tour guide (the President) as we walked from one area to the next, and you could not help but be excited and happy for him.   Everything was state of the art, from the layout of the offices, to the efficient heating technology in the shop, and all things in between.  Each area had been carefully thought out for best uses of space with room for future growth.    We could just see the culmination of best practices being designed into every phase as we walked from room to room.

It reminded me to constantly be looking for new ideas.

Shifting gears we headed over to the existing building, which has been the dealership’s home for over 30 years.  The first person we met was a gentleman at the Parts Counter.  I learned he had left for a short period of time, but returned.   It sounded like the management team may have recognized the value of his contributions while he was away and both their customers and other members of the dealership were glad to see him return.    The next station we walked past was the office manager’s,  I learned that she was now the highest tenured employee in the company, which has to be over 20 years.

Those two individuals reminded me of the value of having quality employees.

Then we met the Corp. IT Manager.   His room was stacked full of servers and monitors and wires running everywhere.   It was a long ways from being the environmentally controlled room one would expect to see and I now had a better understanding why observing the computer room in the new building was overtly stressed during the first phase of our tour!  

It reminded me you can still do an awful lot in less than ideal operating conditions.      

Finally we ended up in the sales office.  On the wall were plaques that told the stories of the monthly volume leaders for the last 15 years or so by the names engraved under each month.   Many of the names were people who were no longer there, some had been promoted to other positions, others simply didn’t fit for one reason or another.   Some left on their own; others left because of the those words Donald Trump has made famous…”You’re Fired”

It  reminded me that no single person is bigger than the business as a whole and you must strive to keep the right people in the right seats on the bus at all times.

There were a couple other points that are worth sharing.  This location is 1 of 8 under this ownership’s umbrella.   And although this was the first, almost every other location had been built new from the ground up at some point over the last 25 years.  So it was very hard for one to think this owner has not put his employees first when those who worked in the other dealerships all had much newer facilities than what he had.  One final thing….that new state of the art building, it will have an office for the founding dealer principal and I am sure it will be a nicely appointed office, but he now only comes in about once every 30 days.

It reminded me of the importance of building a business and not a job. 

So what do you think?   Do any of these attributes sound like the business you are building?  Would you like to build a company like this?   Please share your thoughts on other notable attributes for a successful business.

Chris Steinlage   Kansas City Business Coach

Photo by dcJohn via Flickr

Last year during Restaurant Week, in order to get you thinking about your own level of customer service, we wrote a blog post challenging you to think about the “experience” vs. “the product” as you made you made your way to your favorite eating establishments.    The idea is that the overall dining experience weighs heavily on how you view the restaurant and it is not just about the food.  If two restaurants are delivering comparable dishes, the one that best satisfies all your senses and not just your palate will win in the long run….every time.   Look at your own business with your customer’s eyes and think about the experience your company delivers and and how you go about building repeat business.

These were the two questions posed.

#1) What is it that attracted me to this restaurant?

#2) What is it that will bring me back? (Repeat Customer)

A year has passed (time flies…).  It is Restaurant Week 2013 in Kansas City.  How did your favorite (or not so favorite) restaurants do this past year?   Did any of them expand or remodel their current space?   Did any of your favorites open a new location?   The restaurant business is tough, if you aren’t clicking on all cylinders it can be a nightmare to manage profitably.  Correct staffing, perishable foods, weather events, unexpected swings in the economy, all of these are traps restaurant owners continuously must navigate on a weekly basis.   But even with all that, there are some restaurants that are not only doing well, they are thriving.

Recently we completed a Business Effectiveness Evaluation on a business.   Overall the company was in great shape and honestly there were few areas that were in need of improvement.   Margins were good, they had good hiring procedures in place, and the owner was not a being held hostage by the business he owned. However, during our results and planning session, it was the owner pointed out that there are always areas we can be improving, areas of weakness to strengthen.

“A chain is only as strong as the weakest link.” Proverb

This year we have a new challenge for you to think about as you patronize the restaurants participating in this year’s event.    This year pretend you’re providing input for Zagat.   Enjoy your meal, but we challenge you to look for two areas your favorite restaurant can improve on and especially look at where they can improve without spending cash.    This is a positive, constructive critique where a weak link can be strengthened.   Be observant.  I assure you like our client example above, even the best restaurants have areas they can improve on.    If at the end of the meal you are offered a survey, share your two suggestions with the owner.   Most owners will appreciate the feedback.

Now that you’re thinking about improvement…..

Ok your palate is happy and you have supported the local restaurants and helped some great charities in the process and hopefully you are thinking about weak links and improvement.    Now take a few minutes and reflect on your own business and where the weak links may be (sometimes they are hidden).  If you have an executive or management team, make it a topic of discussion at your next meeting.

1)      Brainstorm areas where you can improve without large capital investments.  Every business has these opportunities, including yours!

2)      Once you have your list, determine the top 2 that will have the greatest impact on your bottom line and create a plan of action to implement.

3)      Execute your plan…if this is an area you struggle with sometimes, you can always get help!

As always we love to hear your feedback and comments.   Bon Appétit!

Chris Steinlage, Kansas City Business Coach

Great Luck photo by JD Hancock via Flickr

This is the time of the year when everyone is wishing you good luck.  It’s a great sentiment and certainly everyone would like to have a bit more good luck…especially after the last few years.  However Luck isn’t all it’s cracked up to be…in fact it turns out that what you do with the Luck you get (good or bad) is really what determines your long term success – you could call this your Return on Luck (ROL).

This idea of Return on Luck was coined by Jim Collins (the author of Good To Great) and Morten Hansen when they released their latest book Great by Choice about a year ago.  Positive Return on Luck was one of several key findings that differentiated hugely successful companies (Great) vs. those who failed or just didn’t make the cut.  What’s really impactful about these finding is that it’s not just an anecdotal experience or a few quick interviews and an example – Collins and Hansen worked with a team of 20+ researchers over a period of about 10 years looking at data and interviewing people from thousands of companies and a time span of about 30 years.

The premise behind the book was to be able to answer the question: “Why do some companies thrive in uncertainty, even chaos, and others do not?”  The goal was to make this study as scientific as possible but they knew they would have to address the concept of Luck…”Sure company X was successful, but they were extremely lucky…anyone would have succeeded with the opportunities they got!”.  In fact the team went into the research assuming they would see disproportionate luck (good and bad) and that would be a key driver for the winners and losers.

In order to find out what role Luck really played, they went through the painstaking effort of reviewing all of the key company’s histories and identifying ‘Luck’ events.  These were things that happened unexpectedly and outside the influence of the company that were good and bad.  They then went on to review what happened to the companies as a result of the ‘Luck’ events.  What kind of Return on Luck did each company get?  There were several interesting findings in the study:

1. Luck is evenly distibuted – you are not more or less lucky than others

Much to their surprise, once all of the numbers and research was pulled together, it turns out that companies in general experienced an equal number of good and bad luck events.  If anything, the less successful companies (the control group) had slightly more ‘good’ luck than the Successful companies (the team called them the 10Xers because their overall returns were at least 10X better than their competitors).

So even though it may feel like you’re getting an unfair share of bad luck…or a competitor of  yours is exceptionally lucky, there are thousands of data points that would say that you’re wrong.

2. Although the distribution of luck was fairly even, the outcomes of what was done with that luck varied a lot!

The 10X companies (the successful group) had much higher Return on Luck for the positive luck events that happened to them…and conversely they also minimized the impact when bad luck came their way.  This was attributed to a few different things:

• The mentality of the 10X companies was different – they never viewed themselves as victims and never used Luck as an excuse.  Instead the focus was on what was in front of them (good and bad) and how to optimize the current situation.
• The 10X companies specifically (and routinely) planned for the worst outcomes.  They had ongoing discussions and strategies laid out to identify what they would do if bad things happened.  If and when they got bad luck, they were generally able to take them in stride.
• The 10X companies had a strong focus on execution – when good luck came to them, they were able to take full advantage of the situation and respond with great execution.  The less successful companies often wasted their good luck because they couldn’t respond to opportunities.

So what’s the point for you?  As you plan for next year, it’s great to hope for some good luck, but if you really want to be successful then you should also spend some time planning for possible bad luck events (and what you could do to minimize them) and focus on your execution…if you landed that super big client next month, are you really ready to make that a great experience (for them and for your employees) and deliver exceptional results?  If you’re hesitating at all with that idea, then what could you possibly to do increase your capabilities?

What’s your take on luck?  Do you hope for the best but plan for the worst?  Would you be ready to jump into a major new deal tomorrow if it came knocking?  We’d love to hear your thoughts – share them in the comments below.

Shawn Kinkade   Kansas City Business Coach

I had an opportunity to guest post last week on the Think Big Partners Blog.  The topic was (of course) business growth and highlights a few ideas from The Pumpkin Plan – here’s the first part of the post, but click through and check out the whole thing (and leave a comment if you get a chance!).

photo by ReneS via Flickr

When an entrepreneur is just starting out, the instinct is to land any kind of business that will generate revenue.  And for the first 6 to 12 months of your business, that’s a good idea – you started with a grand vision and now you need to prove out what your new clients are actually willing to pay for.

However, as you start to grow that indiscriminate growth approach you had when you were getting started will choke your business.  In his new book ‘The Pumpkin Plan’ author Mike Michalowicz was inspired by the pumpkin farmers who grow those monstrous award winning pumpkins every year.  That monster pumpkin is your business…or at least what you want your business to be when it grows up.  It’s healthy, it stands out…and it’s bigger than all the other pumpkins!

In turns out there are a couple of secrets to growing those super size pumpkins…(click here to read the rest of the article on the Think Big Blog!)

Shawn Kinkade  Kansas City Business Coach