A new year, a new plan: five ways to transform your small business
Mon 8 July 2019 - 9:34 amEntrepreneur | Featured | Small Business
The start of a new financial year is an ideal time for business owners to take stock of the business, review progress towards growth goals, and re-align plans as necessary.
While there is no one-size-fits-all approach for businesses to make their planning more effective, there are a number of key considerations that can help business owners improve their position, according to entrepreneur, CEO and elite business coach, Andrew Laurie.
Andrew Laurie said, “There is no universal list of steps a business owner can take to ensure growth or strong performance. Each business is unique, so all businesses must conduct regular reviews of the organisation’s performance, diagnose areas that can be improved, and build a strong plan accordingly. However, there are a number of actions that are important and valuable, and often overlooked by business owners. Considering the following five actions could be extremely helpful for many businesses.”
Five key actions to drive growth
1. Start with the end in mind
For businesses looking to transform, it’s essential to start by defining exactly what the business needs to transform into. For many businesses, setting the right goals that are motivating, exciting, and clear enough to be valuable, is usually a challenge. Those that can improve that process by starting with the end in mind will dramatically increase their chances of achieving exponential growth.
2. Map how the business generates money
Business owners should map the entire revenue journey from when a lead is generated and converted into a sale to how those customers are retained, paying close attention to the margins at each point in the process. While it can be valuable to improve each of those items, a more effective approach is to discern which one or two points in the value chain generate the most return, then optimise those points as a matter of priority. Most businesses don’t but often they discover that there are one or two activities or points in the value chain where they really make money. Optimise those. Most business don’t invest sufficient time in mapping and analysing the cash generation process. Question what points in your process have the greatest impact on your returns.
3. Upgrade the team
Every business needs to develop an exceptional team. Therefore, analysing the current team should be a key part of planning. In the best-case scenario, this process will confirm that the business has a universally excellent team. In most cases, it will let owners identify opportunities to upgrade their team. This can mean bringing in new talent, as well as enhancing training and coaching to develop the existing team. Business owners should start by evaluating team members based on their cultural fit and their technical performance, and look for potential growth.
4. Upgrade management and governance rhythms
Management rhythms are the activities that managers in the business pursue to keep the business going and to keep the business developing. This can include weekly meetings, staff feedback and coaching, and performance management. However, in many organisations, managers are promoted because they’re good at the technical side of the job rather than the management side, so it’s important to improve managers’ people skills.
Governance rhythms are the processes by which managers are monitoring business performance, through dashboards for example, to ensure that the business is delivering. Upgrading these management and governance rhythms has a multiplier effect on growth. Every one per cent improvement in the performance of management processes will be multiplied by at least the number of people reporting to managers in the organisation.
5. Consider exponential growth
Too often, businesses look only for incremental growth, which can limit potential. Instead, business owners should be asking what they need to do this year to achieve 10 times growth, not just a 10 per cent improvement. Actions to achieve this could include ensuring the business has a culture of failing fast and failing enough, being disciplined and focused on targets, ensuring the business is seen as a career accelerant for its people, and more aggressively buying lifetime customers. Realising the company’s potential means moving away from incrementalism and focusing on a more ambitious end goal.
Andrew Laurie said, “Business owners must avoid the trap of becoming so entrenched in the daily operational concerns of a business that they can’t carve out time to take an overarching view of business planning. Making time at the end of the financial year to think deeply about the direction and velocity of the business is essential for owners to realise the growth that they’re capable of. Improvements in these five areas can dramatically increase the business’s chance of successful growth.”