Business growth is a challenge for many small business owners. I frequently find the reason for their struggle is they are focused on the wrong business goals for their stage of business growth. All small business owners should be focused on accomplishing these 3 business goals, in this order:
You see business growth is systematic. Therefore the objectives are already set. You need only apply the formula and your business will grow. Now, I won’t tell you that it is easy to do. But, it is simple and not a mysterious secret that only certain people can decode. If you are willing to do the work, just follow the recipe and success can be yours.
Business Goal #1 – Consistently Achieve Breakeven
Breakeven is your first of the business goals for business growth. While it seems pretty straight forward, you’d be surprised at how many small business owners struggle with breaking even many years after they have been in business.
Consistent breakeven means you can pay your bills every month. The problem is most small business owners don’t know how it happened in the first place. And, they cannot systematically make it happen month after month.
For example if you know we need 3 customers every month to pay our bills, then what is your plan every month to make sure this business goal gets done, step 1, step 2, step 3 and so on. Once you have defined the process, train someone else to do it. Now, it happens automatically and you don’t have to worry about paying the bills for your business ever again!
When you accomplish this you now have achieved the foundation stage of the business growth model. Now you can focus on the next goal – profitability.
Business Goal #2 – Increase to Steady Profitability
Profitability is your next of the business goals. Once you know you can pay the bills consistently you need not worry about this anymore. Next, you need to focus on what it takes to be consistently profitable every month. This should be pretty simple if you already know what it takes to breakeven. Just add one more and you’re profitable.
So, how profitable do you want to be? Be careful how you answer this question. The answer is why many get tripped up at this stage of business growth. How much you can grow is constrained by how much of your product or service you currently have to sell. Do you have the excess capacity to sell to create this level of profitability or will you need to add more?
Once that’s figured out then you can do what we did in the foundation stage. What step does it take (step 1 step 2, step 3, etc.) in order to consistently create this profitability month after month.
Again, once it’s defined train someone else to do it; stop worrying about it; and move on. At this point you have achieved the survival stage.
Business Goal #3 – Scale the Operation for Business Growth
Now that you can systematically pay the bills and create profitability, growing your business is just scaling the systems you’ve already create! This can get tricky. Because as you add more resources, it cost you more to run the business. So your breakeven will change. But, if you’ve already mastered this formula it’s just adjusting your number of sales per month so that it works for your bigger breakeven point.
What I often find is because small business owners think they have mastered the first two business goals of business growth, but when they get to this stage the business stagnates. The reason is the formula has changes but they never understood the formula in the first place. So, they get here and don’t understand why it isn’t working any more.
Once you’ve figured out how to adjust your formulas for breakeven and profitability as you grow then you’ve achieved the self-sustainability stage of the business growth cycle. At this stage you have created independence for yourself. You can grow the business or just sit back and it will generate a comfortable income for you and your family.
Figuring Out Your Business Goals for Growth
Where are you at? Do you understand how to create consistent breakeven for your business? Or, have you moved on to profitability? If you’re not sure download and use our business growth stage self-assessment by completing the form below.
If you’ve figured out these formulas for your business share how you got there. This is a journey every successful entrepreneur will take. Sharing your journey may help someone else navigate the process more easily.
If you want to begin applying these concepts to grow your business faster, then sign up for our DIY Membership. Membership provides you entry into the BGS Community with full access to the step-by-step SPARC Business Growth process, courses, tools and resources.