Spoiler: Successful business growth is achievable, even in a recession
Growing a business sustainably is the same process no matter what industry you are in. How can that be?
Whether you are in manufacturing, service, arts, creative, film, even a cottage industry, you follow a simple three-component business model. From the smallest craft stall to the largest corporation, this three-step process remains the same. The process has changed very little since the invention of money.
The three common components of all business models are:
Growing business sustainably is not all about the environment.
You may think that sustainable business growth is all about eco-products and recycling. We mean growing a business in such a way that you can maintain that growth. Most important of all, you can maintain that growth without a detrimental effect on your existing clients, product or service.
To achieve this is harder than you may think. This article sets out to provide you with some thought experiments, and tips to help you in planning your business growth.
Before we look at growing your business, we should look in more detail at the three fundamental components. Once we have done this, we will ask some pertinent questions to help you identify the business growth tools you need. Finally, we will leave you with some top business tips to consider.
Component one of your business model: Maintaining your day to day System
Maintaining your system is what you do every day of the week, and possibly weekends if you are anything like me. It is the day in day out routine of producing your “thing”. Without you doing this, there would be no business. For me, the system is a balance of quoting for new work and producing the output of previously agreed content. My system is relatively simple. It is a barrel into which I have to tip new projects, and out of which, I regulate a flow of completed projects, and if stop doing one or the other thing, the business folds.
To stay in business, you have to maintain your system. To grow your business, you have to maintain your system whilst simultaneously upping your output.
One of the most important things to remember when you are expanding any operation is that growth costs money. That sounds counterintuitive, but tens of thousands of businesses have gone bust through unsustainable growth.
If you are a baker who bakes fifty loaves a day which you then sell to four shops in your local area, that is your system. You know that you need to get up at three in the morning, you have to have x amount of ingredients ready to go, and that it takes three hours to deliver the loaves. Imagine the chaos that would reign should you agree to start supplying every Sainsbury’s in your county with a hundred loaves by next Monday. This example might seem ridiculous, but these things happen.
Mistakes I have seen when people are growing business
I have seen an office supplies company take on a six-figure contract for developing software before they had a coder or a service team in place. They only discovered that coding and IT support was incredibly complex after they had spent the client’s large deposit.
I have also seen a major high street B to C (business to consumer) brand recruit over two-hundred B2B (business to business) sales staff, train them to a high standard, and increase orders by over three hundred orders a day. Unfortunately, they neglected to recruit any extra administration staff, and most of those orders ended up in a bottleneck, with many business customers left without critical communication services.
If established high street brands and otherwise stable businesses can make such fundamental errors when growing their business, then there is need for caution. Your business growth has to be sustainable. You must be able to cope with demands on human resources, raw material stocks and of course, cash flow. If a significant investment is not possible, then your plan needs to be a mid to long term growth plan. You will need to put a strategy in place, along with a workable budget, and measurable process against which you can monitor your progress.
Some questions you should ask before growing your business system.
- What is your system and how many components would be affected by rapid growth?
- How many people does it currently require to maintain your current output?
- What percentage of increased business can your existing system cope with as it stands?
- Where will you need to invest to cope with more demand?
Component two of your business model: Making a noise
You make a noise to attract new customers. That is how you grow your business on a day to day basis. Many of us outsource our noise making to social media nowadays, often with mixed results. Some may still use traditional advertising.
Niche businesses like theatre-makers, comedians and authors may utilise hand to hand marketing or store appearances to promote their art, product or event. There are many ways to make noise.
Some noises include:
- Signage and Shopfront
- Word of mouth and reputation
- Direct sales campaigns
- Media attention
You undoubtedly make noise. Perhaps you have a shop front which does some of the noise-making for you? Even so, you still need to dress the window. These are all ways of making noise and growing business.
Businesses are coming under increasing pressure from online-competition, cultural shifts and technological advancement. JUT is noticing a significant increase in the number of business owners looking for help with marketing and advertising. An increasing number of businesses are looking to grow online. Crowds of former employees are looking to freelance, or start home-based businesses.
Some questions you should ask to help get your noise heard.
- How many different types of noise is my business making?
- Which noises are heard most regularly?
- Are my noises returning on investment?
- Which noises are returning nothing despite costing me money?
- How long does it take for a customer to respond to our noises?
- Have I budgeted enough to get noticed?
Component three of your business model: Delivering Your Promise
You deliver by nature of the fact that you sell. An author is responsible for delivery, even if a retailer sells the book. As an author, you deliver in the quality of content. An influencer delivers in the same way as an author. You do not have to have a physical product to be concerned about “delivery” as a concept.
Naturally, if you do make physical goods, then you are delivering on reputation, quality and also the physical delivery of the goods as well.
I want to share a saying that has always stayed with me: Under-promise and over-deliver.
Under-promise and over-deliver is the mantra of the wise business person. I first heard it when working for the entrepreneur and retail guru Julian Richer. Over delivery is the short cut to growing your business fast.
If you are currently struggling with low reviews or consistent issues with delivery of your product or service, you have to fix these before you even start a growth plan.
Some questions you should ask to assist over-delivery and accelerate business growth.
- What do your customers currently say about you?
- What are the customer service issues that you regularly face?
- Where are the flashpoints in your business? By that, I mean, what processes are causing emotions to run high. These flashpoints are good indicators of potential delivery issues.
- What is your competition doing better than you?
- What is your competition doing worse than you?
I am sure that whatever stage your business is at, your knowledge and regardless of your mid to long term goals, there are some aspects among these basics that have slipped off the radar. Even writing them down for you has prompted me to consider a couple of points for the JUT expansion programme.
Don’t forget, growing your business means working ON your business
Very often freelancers, small business owners, and creatives can become so fixated working in the business, that we don’t get time to work on the business. This distraction can lead to us losing sight of what we are trying to achieve, or what current market trends are dictating.
Things change, often without much notice. We change. What we wanted five years ago is likely very different from what we want today. View any opportunity to grow your business as an opportunity to adapt your business.
I read a fantastic book on this subject many years ago. “Who Moved My Cheese” – Dr Spencer Jones, is a simple parable, and yet it had a profound effect on me. The book has never been more relevant.
There is an excellent potted summary of the book here.
Growing a business during a recession
I have lived through two significant recessions in my lifetime. I was working as a sales manager for both. There is one thing I can tell you about recessions with absolute confidence. Recessions equal opportunity.
Now, the opportunity might manifest as redundancy and a small lump sum with just three months before you run out of cash! A dire situation like this is an opportunity nonetheless. If your existing business is under pressure, and sales are drying up, this is still an opportunity. We cannot determine the things that happen to us, but we have total control over our reaction to them.
Almost every member of JUT’s team has been fully committed to the arts or performance for many years. In April 2020, we lost our livelihoods. I had a theatre tour cancelled; others also have. Another of our team was in the midst of successfully growing a comedy brand.
Of course, the creative nature of our work means that we love doing those things. Being a writer or an actor is a different experience for me than when I was a precision engineer. We identify far more with our creative sides than our secular skills. I am passionate about my art. I was good at milling and turning.
The JUT team are practising what we preach. We have each looked at what we are good at, and more importantly, what we love. Every day that I am writing, I am happy. It also helps that I am passionate about business development. I enjoy the process of analysing and growing a business.
Some questions you should ask to determine your opportunities
- What are your opportunities right now?
- Is your competition offering products or services that you are not?
- What did you set out to do that you have yet to achieve?
- What would you change if you could travel in time? (spoiler alert, you are travelling in time. Change your future past).
- Who are you? In other words, what gives you so much joy that it does not feel like work?
- What are you exceptionally good at that you could leverage within your existing business, or as a bolt on to your current business?
I hope that by now, you have had at least one eureka moment? Here are some key pointers to consider, as you are designing your growth strategy.
Ten Tips For Growing Your Businesses
- Understand your position in the marketplace.
Are you the new kids on the block? How do your customers and competitors see you? Are your products or services budget, middle of the road, or high end? Answering these questions will help you to formulate a clear path of development, and give you something to aim for when building a new vision.
- Calculate the cost of growth or development
Remember, three areas require monitoring; human resource, cash resource and material resources. All of these areas require investment when expanding, so do the sums. Don’t overreach, or pitch expensive ad campaigns which will get you in hot water if they come to fruition. Equally, don’t spend a king’s ransom on campaigns which will never work.
- Identify opportunities within your niche.
The chances are you are not offering everything you could be. Julian Richer started his empire with a small business loan and a crate of Marantz tape decks. If he had continued to offer only those products, then he would not have built the empire he recently handed over to his staff. (Yes, he did that. You can find out more here).
Read Julian’s Book on how to get the best out of people here. It will be handy if you plan to expand.
- Become an expert or authority
Write a book, produce a podcast or start a blog. Better still, do all three! It is not the quality that counts, though. The frequency and quality of your output are critical. If the world perceives you as an expert, you will attract more clients or fans, and gain more media attention.
- Build an Audience
Number five will naturally happen if you start number four. At very least, create an email database. Marketing by email to an engaged audience is still the best way to grow your sales.
By the way, did I mention that each of these points will be the subject of a separate newsletter? You can sign up to our newsletter here.
Ready for the last five tips?
- Identify those areas of advertising and marketing which are not returning on investment.
We all get into habits, right? There used to be a time when you had to be in the Yellow Pages. Businesses would get into bidding wars for the rear cover, as this is the first page a reader would see as they flick the pages. I worked for a company that paid over £100K for that page in 1989. Would you spend that now? Some businesses haemorrhage cash on Google Ads, and never see the return. Reinvest your wasted spend elsewhere.
- Carry out a SWOT
You will likely have heard of a SWOT if you are in business already. If not, it is a Strength, Weakness, Opportunity Threat analysis. Maybe it is time to carry out a SWOT and see how things are stacking up?
- Ask yourself, Am I happy doing what I am doing?
Number eight is probably the most crucial aspect as far as I am concerned, although it is also the hardest to achieve. I spent a long time doing things I didn’t enjoy doing, just because other people said I was good at them. My mantra is; “Just because you can, doesn’t mean you should” – if you are not enjoying what you do, then it makes no sense to grow your business and do more of it.
Maybe this is time for a change.
OK, there is a lot of information there if you are looking to grow your business. Spend as much time as you can when considering all of these facets of business growth.
If you are stuck, I offer one free hours consultation on a Monday, and one on a Friday which you can contact me about here – it is first come first served, although if those slots are gone, and you are under pressure, you can book me for an hour or more for a small consultancy fee.
Finally, once you have created your vision –
- Plan your work
- Work your plan
What should you do now?
Joined Up Think is a creative collective. Find out more and meet the team here.
Opportunity is around every corner. Whatever stage your business is at there is a way to grow your profits. Joined Up Think can help you on your way using strategic thinking, marketing and brand development.
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If you are ready for change, then we are ready and waiting.
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