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