You Think The Recession Is Holding Back Your Growth?
By Robert Craven
In research, growing businesses say that market conditions would have the greatest impact on inhibiting their growth. It does not surprise me that businesses cite market conditions as the key influencer of growth but this does blur some of the key issues around the subject of growth.
Research,
as well as an intuitive feel, consistently suggests that there are
several key factors that inhibit the growth of a business. No one
factor dominates but rather a combination is what the entrepreneur
normally cites.
The
three key issues are:
Market
conditions
Staff/recruitment
issues
Cashflow,
and
Competition
Put
another way; finance, labour and market issues.
However,
the growth question provokes some other arguments about growth that
need to be aired.
One.
Of course market conditions impact on business growth; in a growing
market, your business can grow without gaining market share. Think of
the market as a balloon; if your market share is like a circle drawn
on its surface then your area (turnover) will grow as long as the
market grows - imagine blowing air into the balloon and how the
circle will increase with the increase in size of the balloon.
Two.
If you ask successful people to look at what held them back in the
past then you get another answer entirely.
After
the event, successful people do not dispute the importance of
finance, market and labour issues. Interestingly, these are seen as
external
factors. Research such as the LBS Pulse Report concurs with Tenon
that the number one external
factor holding back a business is, to be specific, market growth.
BUT... the key internal
factors cited are lack of innovation and the thorny issue of
willingness to accept the price you have to pay for the growth.
The
plot thickens.
Here
is the crunch... the core of the debate about growth and what holds
it back... the 'winners' claim that the ability to grow is
dominated by the internal factors (lack of innovation, fear of
diluting ownership, aversion to debt). So, to grow, you must possess
conducive internal factors that dominate the hostile external
factors.
At
the heart of this argument is the price of growth... are you prepared
to accept the loss of managerial and/or financial control? If you
are not, then do not pass 'GO' and do not collect your 200 pounds!
Three.
Rather than focusing on
poor performance let's ask 'What is it that the really successful
businesses do?' The successful are obsessed with:
Where
do we want to be in, say, three years' time? i.e. strategy -
planning while being aware of the outside environment
What
is it that our clients really want, and how can we get people to buy
it? i.e. marketing
How
can we work together? i.e. teams and people.
This
holy trinity of strategy, marketing and teams (underpinned by
financial understanding) is an obsession that I find in all
successful fast growth clients. These clients don't look at market
conditions alone, shrug their shoulders and give up trying - they
are constantly measuring the outside environment and constantly
adjusting their game to suit the conditions.
It
is probably changes in the outside world that will 'get you' in
the end. Often imperceptible changes in the market place change the
landscape that you are working in and you might not even notice the
changes. It is the ability to recognise and respond to change that
separates the exceptional from the average business.
So,
when asking the question 'What inhibits growth?', we cannot
expect a simple answer. I agree that the number one issue is market
conditions (when each participant can only have one choice).
However, the reality is more complex.
About the Author:
Robert
Craven shows MDs and owners how to grow their sales and profits and
focuses on how to do this in recessionary times.
He
is a keynote speaker and the author of business best-seller 'Kick-Start Your Business' (foreword by Sir Richard Branson. His
latest book 'Grow Your Service Firm' is out now!
www.robert-craven.com/gysf.php
He
also runs The Directors' Centre, helping growing businesses to
grow. For further information, contact Robert Craven on 01225 851044
rc@directorscentre.com
