Why adherence to sound practices is vital for long-term business success
Tue 15 May 2018 - 8:30 amOpinion
When you consider the thousands of business owners in Australia, it’s highly unlikely any of them would intentionally hamper their organisation’s consistent growth. Unfortunately, however, many are unintentionally doing just that.
Across the country, many business people are inhibiting their success by not learning, adopting, and adhering to good business practices – and this is a recipe for disaster. Indeed, while there are plenty of examples of businesses that started small and grew large, there’s also no shortage of examples of businesses that appeared to be doing well but folded during expansion.
Achieving effective growth
Growing a business is just as risky as remaining stagnant in a competitive market. Whatever the avenue of expansion chosen, there are inherent risks and getting it wrong can have serious consequences.
The method of growth used should match the business type, the market in which it operates, and the product or service being offered. Growth methods include organic growth, acquisition, joint venture, or licensing and franchising. There are eight reasons it’s important to grow a business effectively, and they are:
- Increased visibility and productivity
It’s always important for a business to manage its operations to promote and sustain growth. This growth takes place through internal expansion, external growth (as in a merger) or through diversification into related industries. The business plan, productive tools and project management software must be first class as these will determine the business’s capabilities and responsiveness to growth.
- Greater diversification
The Virgin group started out as a record shop and grew into a world-class airline. It’s also active in insurance, mobile phones, and even space travel. Diversification is a risky business however the strength of the Virgin brand and its financial reserves gives it the leverage to successfully withstand the risk of entering new industries. It’s interesting to consider that, had Virgin remained just as a record shop, the chance of going out of business would have been just about inevitable. Diversification can deliver big benefits, but also comes with risks. Even with all the right elements in place, such moves must be carefully measured and calculated.
About the author
Patrick Elliott, Regional Vice President, Australia New Zealand, Anaplan