Anyone growing a business is going to make mistakes. Despite the best planning, they still happen. But there are certain growth mistakes that I see happen far more often than they should. As a consultant who has worked with countless business owners to ensure their business sees the kind of growth that will sustain over time, I’ve gathered 8 of the most common and avoidable growth mistakes here.
Take a look at these mistakes and see if any ring true in your experience. Even if you’ve made them in the past, there’s no reason to continue making them now. Instead, learn how to identify them, course correct quickly, pivot to a better strategy, and learn new habits and skills that will set your business up for sustained success.
The 8 growth mistakes:
- Setting unreasonable growth goals.
When you declare a growth goal of 20%, or 50%, that places an unreasonable burden on your business. It sets up a build/buy quandary when it comes to staffing, for one: Do you staff-up to meet elevated growth goals, or wait for the business and, if successful, run the risk of not being able to implement and fulfill because you’re scrambling to find staff with the right skills? Post-pandemic, this is a chronic problem.Another problem is the stress it puts on existing leadership and employees, and the ripple effect on stakeholders. You and your people can burn out from overwork and become highly stressed as goals remain on the distant horizon. You lose the credibility and faith of lenders, supporters, existing customers, and family. Instead, avoid setting unreasonable growth goals by focusing on the things that you do in your business that need to be improved or replaced.
- Focusing on shiny new toys.
Shiny new toy syndrome can seriously impede a leader’s focus. True story: I once worked for a corporation where everyone was in terror when the boss went to a workshop or seminar, because he would come back with the latest “new idea” and want to change everything already in place. This happened so often that productivity plummeted during all the reorganizations.Short-term goal hopping results in the unconscious abandonment of longer-term, strategic goals. Instead, play with the shiny object before you implement anything. If it breaks down, doesn’t do what was claimed, or makes your life worse, toss it before it tosses you.
- Not checking in on stated goals.
When a business leader doesn’t take at least a once-a-month pause to review progress towards stated goals, that can lead for some very unwelcome surprises. I’ve seen leaders opt for quarterly progress reviews, or even less. But those are woefully insufficient. By then, the issues are already well underway.There’s also no sense having goals unless you have the metrics in place to measure progress towards those goals. Instead, set up the measurements you need to gauge progress in a tangible way. You’ll get a good idea of business performance. If you want to keep to monthly reviews, set up quick reviews weekly (or even daily) as well. Those are the best way to avoid surprises.
- Hiring (and keeping) the wrong people for the job.
If the pandemic and trends like quiet quitting and the Great Resignation have taught us anything, it’s that merely seeking and replacing “bodies” are woefully insufficient hiring strategies, and managing employees without clear requirements and outcomes can create friction and waste energy. Leaders that merely replace people aren’t considering what their own future needs are; leaders that have to micro-manage are spinning their wheels.Instead, provide your employees with a set of three clear outcomes you expect every month, obtain their commitment (or modifications), and then hold them to it. Every month. Be specific: “Take care of inventory” is meaningless, but “Keep inventory breakage to under 10 percent of total inventory” is very clear and measurable. In this way, you won’t have to micro-manage anyone. In terms of resignations and turnover, view them as opportunities to seek talent that better matches your growth needs.
- Running excessive overhead.
Nothing is as deadly for business growth (or even survival) as excessive debt, and nothing creates excessive debt as fast as payroll. This is a huge dilemma for growing businesses because of the build staff/grow or grow/build staff “chicken and egg” phenomenon.Make an organization chart to give you a visual representation of your business. In addition to their names in the box, place the employee’s total compensation alongside. This exercise helps you to understand if you’re getting the return that you anticipated from that employee’s efforts.
- Lacking sufficient working capital (cash and/or financing).
One thing is certain: You know exactly how much your expenses are in any given month. But what you don’t know is how much revenue you will generate in any given month. If your overhead is too high, you can’t use your profits to keep growing your business — and you’ll be on the never-ending chase for finding more money.Instead, keep your overhead low enough that you can put the profits back into growth. Avoid the natural tendency to start spending money you don’t have.
- Not testing the market.
It’s a fatal error to not test the market. Not talking to your customers about what their needs are means your business may not be aligned with their needs — and that alignment, and the quality goods and services you provide are as important for business growth as for having a successful business. There’s nothing worse than offering a product or service that customers aren’t interested in.Avoid this by staying in touch with customers through regularly scheduled phone calls and meetings that build on your ongoing relationship.
- Underpricing products or services.
This is a simple mistake that’s made by so many business owners. Underpricing doesn’t just lead to lower margins. It drives a lower perception of value.Avoiding it is just as simple: learn how to get your value. Know what that value is, and don’t undercut it.
Growth doesn’t just happen. It requires repeating existing habits and applying existing skills to begin progress to exploit what you already have and acquire what you need. But the key to building a sustainable business is profitable growth, not just growth — and not a high-growth, no-profit strategy, no matter how alluring it might seem.
Written by Manny Skevofilax.
Have you read?
Countries: Powerful Passports. Countries: Richest. Countries: Poorest. Countries: Happiest. Countries: Life Expectancy.
Add CEOWORLD magazine to your Google News feed.
Follow CEOWORLD magazine headlines on: Google News, LinkedIn, Twitter, and Facebook.
Copyright 2024 The CEOWORLD magazine. All rights reserved. This material (and any extract from it) must not be copied, redistributed or placed on any website, without CEOWORLD magazine’ prior written consent. For media queries, please contact: info@ceoworld.biz
