Ever since the economic crisis hit the world, many companies, and individuals for that matter, have been very concerned with their financial well-being. Across different countries there are numerous stories about companies that were forced to dramatically cut back in order to stay profitable.
In recent years most companies have been driving all sorts of programs to improve the bottom line, basically by reducing costs as much as possible.
Both operational costs (working cheaper) and capital expenditure (investments) have been reduced, in some cases to the bare minimum. Today there seem to be hardly any more costs that actually can be cut, so what do we do now?
Before answering that question let’s take a step back and contemplate about the raison-d’etre, reason for being, of companies. Are companies here to put people to work in a fulfilling way? Do they intend to create products and services for other to consume?
Yes. However, the primary objective of any company is to grow its value for the business owner; in some cases stock holders, in other cases entrepreneurs such as your local bakery. Any owner wants to be able to transfer the ownership at a moment in time and make a profit on it.
The value of a business can be quite difficult to determine. Some good indicators are the revenue and profits made. Since the start of the economic crisis, businesses have focused mainly on keeping profits up. Growing the revenue received little priority.
Keeping revenue stable seemed challenging enough to some, under the assumption that markets declined. Effect of this is that many companies today find themselves to be very lean and mean, but with little ideas on how to grow revenue again.
The answer resides in finding the right way to grow again. Growth is always there; you just need to open up to actually see it. Even in declining industries there are companies still growing their market share and the volume of sales they are able to generate.
It is difficult… well, it is not easy, otherwise everybody would be growing. There are a few simple guiding principles to bear in mind:
- Growth most often comes from outside your company.
To spot growth opportunities you should look outside of your company. Assess market dynamics and talk to customers to identify what they need.
- Find pockets of growth.
In every business the concept of up-currents applies. An up-current occurs when hot air rises. It enables glider pilots to rise high. You should look for the up-currents in your industry and understand what you need to do in order to benefit from them.
- Shift gears, and make some changes.
To achieve growth again you will need to make some changes to your business. Changes to the markets you serve, the customers within those markets, the products and services you deliver, the way you collaborate. All of these are worthwhile to consider for change.
- Your business model determines your success, not your product.
As mentioned in a previous post, a great business model trumps a great product. Do not get stuck on the details of your products or service. “Good” is good enough.
Many New Year’s resolutions have already been broken. Now is the ideal time to make a resolution and stick to it. 2013 is the year to grow again!