Business Growth Simplified
For nearly a decade DE, Inc. has focused on the entrepreneur community by helping small business owners prepare their businesses to operate without their direct day-to-day involvement. We created an entire line of small business tools and small business training to assist with the process. National, regional, and local organizations catering to small businesses have partnered with us to offer these tools. I will admit, over the years I’ve struggled to communicate what we do. Then at the end of 2010 I had my first “aha moment.” It hit me that how you applied our tools and training was dependent on where you and/or your business were in the small business growth cycle. The result of researching my hunch was our The Small Business Growth Matrix. The light bulb went off again while finalizing our strategy for an upcoming marketing campaign. As I began trying to simplify the way we communicate how all the pieces we offer fit together the definition of entrepreneurship became crystal clear!
The Entrepreneur DefinedThink of the small business growth model as a map. It is a map you follow to successfully grow a small business. And the way that we’ve laid it out for you, step-by-steps in order right there for you to follow. This is our SPARC Business Growth Framework. While SPARC provides the steps, you must possess the skills to accomplish the steps along the way. In the model there are two sets of factors that directly impact business growth – leadership and management factors. The leadership factors relate to skills necessary to lead your team in achieving the objectives for each stage of the growth cycle. This is the “personal change.” This is the "personal growth" we speak to within the DE,Inc. tagline. As an owner, if you are not ready to tackle the things necessary at your stage of growth, then your business will suffer as a result. So, personal growth is key to becoming an entrepreneur. This is why leadership topic is a major part of this blog! To address the management factors you need to ask the questions, does my company have the systems, personnel, and financial wherewithal to accomplish the goal required at their stage of growth? Again, if you don’t understand these aspects of management your company will stagnate. These are the management topics which we discuss within this blog. We’ve given you the map. We provide you with the knowledge, tools, and assistance to master the personal and business challenges you might face along the way.
How Do You Become an Entrepreneur?Master the personal and business skills needed to navigate the map!!! If you successfully accomplish this you can call yourself an entrepreneur. Our free eBook - The Missing Component to Successful Entrepreneurship will give you the insights you need to get focused and achieve real entrepreneurship. You can download a FREE copy by completing the form below. What do you think? Is it really that simple? Notice I said simple. That doesn’t mean it will be easy to get there. In fact, I can tell you it’s very hard becoming an entrepreneur. But if you want it bad enough it's all right there for you in black and white. If you'd like to begin to applying our systematic SPARC process to your business check out our DIY Memberships. They will allow you to follow along no matter your stage of the growth model. Additionally, all of our e-books, videos and tools are all part of your membership. We look forward to serving you on your journey toward becoming an entrepreneur.
Download The Missing Component to Successful Entrepreneurship
Marketing for startups is often difficult because small business owners don’t understand the difference between sales and marketing. (see my previous post Sales Slump? Do You Have the Right Resource Assigned?). Marketing for startups is all about understanding what the customers wants to satisfy their need and communicating exactly what you can offer to fill that need. The first step us understanding the market’s need. This takes shape by following a very simple process:At first this is done using research. This research has the goal of finding out about who wants what you have to offer, why, and where they are located. The post 3 Problems When Shoestring Marketing will provide a little more insight on this research aspect of marketing. As you complete the research you must disengage yourself from the emotional excitement of your idea and look rationally at what is really possible. If you let yourself, the research will tell you if there are enough people that really care about your offering to make it a real business. Listen to what the numbers are telling you here. If not, you will spend a lot of time and money on something that doesn’t have a chance no matter how hard you try! Marketing for startups next needs to communicate what you have to offer to the market. That means sending the right message to the right people to get them interested. Creating this message is often a difficult task for new business owners. They are so excited about their offering that they only talk about their offering and forget to tell the customer how it will benefit them, solve their problem, and fill their need. Our online course Developing Your Brand Position is designed to assist you in developing that message to your market place. It is this habit of talking too much that kills many small businesses’ growth. They are telling the customer about their product instead of listening to what the customer is asking for, wants, or needs. Listening is the best skill you can develop when marketing for startups. The market will tell you what it wants. You need only be willing to listen and adjust accordingly. If you cannot adjust, it’s only a matter of time before the market will leave you behind. So, at the foundation stage, marketing for startups is no different than at any other stage of the growth model. But, you want to establish good habits marketing for startups and they will help you as you move up the growth stages. It’s all about research and communication. Listen to what the market is telling you and communicate as effectively as possible how your offering meets the need.
- Describe your offering
- Identify your target market
- Analyze your competition
- Define your competitive differentiation
- Develop your marketing strategy
8 Things You Can Do to Achieve the “Survival” Stage of Small Business Growth. In a previous post titled Is Indecision Keeping You and Your Business from Success? I discussed a major decision for the business owner navigating the self-sustainability stage . It is a fork in the road. You can either:
What you will notice here is that there are a lot of the same objectives here the real difference is what the owner’s role becomes. This is a difficult transition point for many entrepreneurs. Most didn’t get in business to become a professional manager. They started their business because they had a passion. See my previous blog post titled Why So Many Small Business Owners are Unhappy to get a better sense of the challenges entrepreneurs face at this point in their personal growth. If you cannot get past this point, neither will your business. So, you need to take a hard look in the mirror and face some tough things deep down inside!
Are you at this point? Are you unsure of what you really want “when you or your business grow up?” For those of you that have faced these demons and won, share your journey. It will help others to see that they are not alone and that there is a light at the other end of the tunnel.
Next, we’ll take a look at the business objectives so stay tuned to next weeks post…
- prepare the business for rapid growth
- develop the business to sustain its current level of success
4 Leadership Objectives Impact the Self-Sustainability Stage of Small Business’ Growth Cycle:Let’s look at the Leadership Growth Factors and we’ll take a look at the Management Factors in Part 2 of this post at a later date.
The Small Business Growth Matrix was launched more than a year ago. Since then I have written many posts about small business growth. If you’ve been following, I hope you have learned a lot. In applying the model day-to-day to clients, I too have learned a lot. I have learned enough so I can boil down the essence of Churchill and Lewis’ small business growth model to a few very powerful components.
The Small Business Growth Stage is Set:First and foremost you must understand at what stage is your small business growth. If you don’t know from where you’re starting, it’s difficult to chart a course for success. The post in the previous link will give you an excellent overview of the stages of the growth cycle. If you are honest in evaluating yourself against the model, it will be easy to determine your business growth stage. With your stage defined, use the Small Business Growth Matrix to define your objectives to successfully navigate the next stage of business growth. The tools and services we offer at DE, Inc. help you accomplish what you need along the way to achieve small business growth!
Contributing Factors to Small Business GrowthThe next components in the growth model are addressing the two key factors contributing to successful growth. Churchill & Lewis’ research found that owner ability and company systems have a significant influence on a business ability to grow. While this may seem pretty obvious, know which owner company factors to address and at what stage is the “secret sauce.” Again the reason I develop the Growth Matrix. It provides the receipt with exactly where you need to focus on owner factors and company factors as you make your way along the growth cycle. Let’s take a little closer look at what makes up these critical two areas.
Leadership = Owner Factors Contributing to Small Business GrowthChurchill and Lewis found 4 sets of skills that an owner needed or needed to address through the right team members were necessary at every stage. These are as follow:
- Owner Goals
- Operational Abilities
- Managerial Abilities
- Strategic Abilities
Management = Company Factors Contributing to Small Business GrowthThe 4 company factors that Churchill and Lewis found were critical to business growth are:
- Financial Resources
- Personnel Resources
- System Resources
- Business Resources
Successfully Achieving Small Business GrowthWith the foundation laid here you just need a little better explanation of where to focus depending on your current stage of business growth. In the coming weeks and month this will be the focus of the posts. They will provide you with the areas of focus stage-by-stage. Future posts will look in more depth on management and leadership challenges at each stage and provide tools and techniques to help you meet the challenge. You can subscribe to our newsletter to receive more of this information. While some of this material already exists on this blog in various forms. I felt that a more structured form would allow readers to more quickly find what they were searching and where to get the help they needed in order to face the challenges that they face on a daily basis in their own business. Master the skills necessary to address the challenges along the way and entrepreneurship is your reward! Are you up to the challenge?
This week let’s get back to looking at the strategic objectives within each business function as you move your business along the growth model. So, far we’ve looked at marketing and sales. The next logical step is to take an operational focus. No matter what business you’re in, there are some key factors that you must address from a production perspective or business growth will eat you for lunch! There are 4 areas one or more of which are almost always missing when I begin working with a new client.The reason these things are so important in the foundation stage is because they support growth. If you don’t address them at this stage, they will consume you in the latter stages as you try to support what is already out there along with new work generated by growth sales both at the same time. If you’re not sure of the major objectives in the foundation stage, take a look at the post titled, “Is Your Startup Focused on the Right Objectives?” Remember you don’t have to be a startup to find yourself at this stage of the growth cycle!
- A detailed understanding of what it takes to breakeven
- Complete your installation/delivery SOP’s (quality assurance)
- Establish a customer service policy and framework to support it
- Provide market feedback for product/service improvement
Understanding BreakevenThis first objective is focused on the primary goal of the foundation stage – breakeven. Many small business owners don’t even know this number, much less have a plan to get there! My assignment for all clients at the foundation stage is to build a detailed plan of what needs to happen to consistently breakeven every month. Here is why! If you do build a system for breakeven you can delegate this responsibility to someone in the company and not have to worry about it day-to-day any more. This frees you up to focus on more critical aspects of the business, like beginning to focus on profitability and how to get there consistently.
Consistently Assuring QualityAny time I ask a new client about outsourcing to build capacity they grimace in agony. More small business owners fail at outsourcing than should. The reason is they don’t show their vendors what a delivered product or service should look! They leave too much to chance and then are surprised by the result they get. If you have a product that you manufacture quality assurance comes in the form of a specification. It’s a plan the product is built to and that the delivered product’s quality is measured against. For a service this is an operating procedure as to how a service technician or rep would deliver what you sell. Now you can evaluate what was delivered as can the customer. If it matches with what your marketing materials and contract state, you can cover yourself from unexpected complaints.
Customer ServiceWhy do you need customer services at this stage of the game? Because if you are not thinking this way from the beginning, you will create problems before you even start. A customer service policy is actually a critical part of defining the “persona of your business! It tell potential customers exactly how you will treat them. If you say you provide superior service in your literature, you’d better deliver on that promise or you will have an even a bigger problem – a bad reputation in the market!!! Internally it tells your employees what is expected of them and sets the tone for their performance evaluations. This is what allows you to hire better employees by showing the expectation upfront and giving you a set of criteria from which to evaluate new hires. There is nothing worse than get bad hires from the start. It can take months if not years to recover from a bad decision here.
Market FeedbackYou made some assumptions when you got started. As you begin to close business listen to the feedback during delivery. This is good feedback on how you can provide more of what the market wants. In the past post title “Listening – The Best Marketing Skill in the Foundation Stage” I talked about the importance of listening to the market. This is a good way to get that feedback without spending more money to get it. Your installers or service reps are engaging with the customer. Don’t be afraid to ask them what they think! If you are, then you’ll miss out on an opportunity to grow faster. Good feedback at this point will allow you to adjust as you move into the survival stage. The more ready you are at this point the faster you can move through this stage. This is often the difference between getting to self-sustainability stage in 3 years instead of 5. So, how fast do you want to be there?
Putting It All TogetherNow, a lot of people will say, “Dino, this is way too soon for this stuff.” But, I disagree. If you wait until later you will not have time to think about this stuff or will have to stop forward progress to deal with it. Also, you will develop bad habits within the employees that are much more difficult to break once they are established. Growing a business is a defined process, but it’s not the path frequently taken. That’s why so many businesses fail. If you are just getting started or struggling in the foundation stage, I would recommend that you read our eBook title The Startup Guide to Business Success. In it you will discover some of the less know things that can be the difference between success and failure in a business. Don’t leave your business to chance. Learn what you need to have the success you seek!
In my last post titled 4 Owner Objectives to Achieve the Self-Sustainability Stage of Business Growth we explored self-sustainability stage. I talked about the 4 areas that an entrepreneur/owner needed to focus in the following 4 areas for the business to achieve the self-sustainability stage:Of these 4 the Owner’s Goals is the most critical as it provides the constraints on which the business plan is built. The choice here is whether the owner wants to grow the business or just develop the business to sustain its current level of profitability. You can see this decision has a major impact on the steps that follow. It is frequently indecision causes stagnation for many businesses at this point in the growth life-cycle.
Theses are the same 4 factors from the previous stages. Notice everything is focused on the business functioning on its own. It is all about removing the owner/entrepreneur from the operation and day-to-day business so that the company continues to produce cash flow and profit at its current levels and beyond.
If the word REMOVE makes you feel uneasy, don’t fret. This is the biggest obstacle I face when consulting with small business owners. Because they have allowed themselves to be defined by their business “letting go” is the hardest thing they’ve probably faced besides starting their business. Unfortunately, at this stage they’ve become so comfortable with life and their business that they are unwilling to let themselves get uncomfortable so the business can enter the self-sustainability stage of the growth cycle. So the business stagnates and the owner finds him/herself caught in "Nowhere Land." They become dissatisfied with their life and business and are not sure why.
I have seen owners fight this change to the point of putting their business into bankruptcy or even working it to die a slow painful death. In the process they hurt their family and the families of the people they employed. Are you this stubborn that you would do this?
If you find yourself caught in this quagmire, then you have some real soul searching to do! Contact me at email@example.com. I will be happy to share how I have helped entrepreneurs navigate this rocky shoreline and may be able to assist you too.
Another way to get through this dilemma is to share with others that have already made this transition themselves. If you have been able to successfully make this transition yourself tell your story here. It is helpful when someone is struggling to see that others have shared this struggle too and have successfully come out the other side! We’re waiting to hear from you…
- Owner Goals
- Operational Skills
- Managerial Abilities
- Strategic Thinking
4 Management Objectives Impact the Self-Sustainability Stage: