My first foray at the gym was a dreadful mix of bewilderment and embarrassment. I was in my teens and thought weightlifting would be a great way to spend my offseason, building beach muscles instead of extra training in the pool or in the crew boat. Everyone in the room was either dead lifting or bench pressing — clearly, I should be doing it, too!
I jumped right in without a plan or any knowledge of technique. As you can imagine, I immediately pulled my back, shutting me down for the rest of the summer. I’m still fighting a bad back to this day.
While my motivation was admirable, my methods were not. Not only was I arguably there for the wrong reasons, but I also didn’t approach the endeavor with a plan, process, or clearly defined goal.
This new year, and new decade, can electrify your entrepreneurial spirit as you look to grow your business. But don’t let unfocused energy zap your results, like it did with my initial weightlifting experience.
Take a long-term view with your growth plan and use processes relentlessly to clarify your message for your clients, improve efficiency with your employees, and streamline your own efforts to ignite growth, profitability, and value for your business.
1. Focus On Value
I’ve learned a little secret running my own business: Customers and clients don’t care about your products or services; they care about their problems. You may have the most effective widget in the world, but if you don’t relate that widget to your customer’s unique needs or goals, more will sit on the shelves than should.
Make sure you are framing the value your company brings in terms of the customer. For instance, when out at networking events, don’t simply say “I repair boat engines.” Instead, state the pain point that a prospect has and then relate it back to your services.
Using our marine example, try “You know how boat engines are constantly breaking down and costing you tons of time and money at the boat yard? I make home visits to quickly diagnose and fix all types of engine issues, and I can do it on your time so you can get back out on the water with your friends and family.” Sounds a lot better, right?
Focusing on value not only relates to your marketing message but also your business operations. Profitability is often the main measuring stick for a business — and arguably should be — but myopically focusing on a single year-end profit figure can lead to unintended, and unwanted, consequences.
For instance, are margins expanding because you haven’t invested in improving your systems, machinery, and service? This can lead to short-term improvements in profitability, sure, but will choke off future growth in the value of your business.
This is especially important for firm owners considering an exit in the near future — is your business valuable enough to sell? You might be able to coast on the current cash flow, but can a new buyer expect the same results five, ten, twenty years down the line without having to make major overhauls?
2. Systematize Your Goals
I’ve touched on the need to systematize your processes to increase business value, but the same principle applies when drafting and implementing your goals for the year. Oftentimes, we see business owner clients set a single year-end goal — add ten new clients, improve profitability 10%, introduce two new product lines — and call that their growth plan.
It’s simply not.
A better approach is to establish a series of goals, define ways to track progress toward those goals, and impose forcing mechanisms to ensure accountability at defined points in time. We employ the objectives and key results (OKR) framework at our firm and discretize our OKRs into quarterly “sprints.” This serves two purposes:
It’s much easier to focus on a ninety-day objective than a 365-day dream. This keeps energy high and focus sharp.
It allows for much more tangible evaluation of our progress. If we want to add twenty-five new clients a year, what is required over the quarter to ensure we are on track? How can we translate that into monthly targets, weekly deliverables, and daily tasks?
3. Create Scale
Creating scale is the fuel to propel business growth. Scale comes in two different flavors — organic and synthetic. Without either flavor of scale, your business is rowing against the current without a compass.
Organic scale is the scale inherent in your product offering. Is revenue growth expanding as you add new customers? Are new business lines accretive to revenue growth, or do they linearly consume resources to generate revenue? This is easier to achieve for manufacturing firms, where fixed costs of production can spread across variable, and increasing, order flow.
That doesn’t mean the service economy — trading hours for revenue — is stuck without scale. Synthetic scale can circumvent the obvious organic scale headwinds associated with time as your limiting resource.
Synthetic scale can occur through delegation and (you guessed it) systemization. If the best use of your time is spent in front of clients or creating products for future distribution, then operational tasks such as bookkeeping, note-taking, or marketing should be delegated. Having a strong system that tracks incremental progress is critical so that delegation does not become abdication.
Long-Term Habits Lead to Long-Term Value
The new gym-goers in January often aren’t there come March. I’m happy to say that I refined my weightlifting regime from that initial attempt and now regularly stick to a defined program, keeping form in focus and evaluating my progress weekly.
Motivation cannot last without navigation, so don’t let the excitement you have for your business in the new year and new decade slip away because you don’t have the proper growth plan in place. If you would like to learn more about how we help business owners craft and execute on a growth plan, sign up for our monthly newsletter.