For the next few weeks, I’ll be discussing business growth: what is it, how do we measure it, is it good or bad, how do we grow, and perhaps most importantly, should we grow? So while you’re thinking about answers to these questions, let’s get the mental juices flowing by looking at the first myth surrounding business growth:
A business must grow or die.
There is a common belief that a business must grow or die. Meaning, if your business is not constantly growing, you are losing ground to your competition and your business will eventually fail. Not only do I disagree personally, and as a business owner, but there is no scientific research that I’m aware of that supports this claim. At worst a business needs to increase revenue to keep pace with increased costs.
Growth is like a gas pedal: push the pedal down and things go faster. Making things go faster also means it hurts more if you hit a wall, so make sure your steering (people), your dashboard (processes), and your brakes (controls) are up to the task as well. Then you need to let up on the gas pedal to let your people, processes and controls catch up with your growth. Then you put the gas on again and repeat. That’s the basics of business growth, but the devil is in the details.
Managing growth means managing your people, processes, and controls. Business growth should happen when it is right for the business. Sometimes that means lots of growth for a long time, sometimes it’s “steady as she goes” for a while, and sometimes growth is not in the cards at all. Growth is just a means to an end. If the leadership team of a company decides that the time is right for growth, then by all means, grow.
In the weeks to come, we’ll look more closely at what it means to manage people, process, and controls, as well as business growth in general. For now, consider the following points if you are trying to figure out if it’s the right time to grow your business:
- Are you currently operating under your competition’s radar? If so, will growing your company put you on their radar or in more direct competition with them or other companies?
- Will becoming bigger allow another, smaller company to take business away from you just as you took business away from other larger companies?
- Can you literally afford to grow sales staff, product lines, marketing, support people, AP/AR/HR people, or management staff?
- Do you have processes in place today (or can you put them in place) to manage the growth, monitor its effectiveness, and know when your growth spurt is over?
Next time we’ll look more closely at the three myths of growth and what growth means.