Imagine this scenario: You start your company, it is wildly successful, and then, seemingly all of a sudden, things come to a screeching halt. You aren’t attracting new customers and your profits are leveling off, maybe even dipping below normal. By all counts, your business is in a funk.
Small business owners often find themselves in this exact situation…questioning where things went wrong.
How can small businesses continue positive growth?
Determined to find out, I sat down with two business experts: Jon Picoult, founder and principal of Watermark Consulting, a business advisory firm based in Simsbury, Connecticut; and Rebel Brown, author of Defy Gravity: Propel Your Business to High Velocity Growth and founder of Zero Gravity, a business strategy consultancy in Santa Cruz, California.
Q: Why do some small businesses stop growing? What causes the slow down?
P: We are creatures of inertia. If your business has been going well, you may experience a sense of momentum—confidence that people are satisfied with what you are bringing to the marketplace. This confidence can create blind spots. If things are going well, it is less likely that you will step back and see if a growth trajectory will continue into the future.
B: Companies get stuck because owners believe the status quo will continue to garner success. We all build up things we know to be true, and while those things may have worked in the past, our market is changing so quickly that they may not work anymore.
Businesses need to change consciously and continuously. The more scary the economy, the more we tend to hang on to what we know. That is not a good idea. It is important to challenge the status quo in business and ask ‘why not?’
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Q: How can small businesses maintain positive growth?
P: First, look at how you define your business. Do you define it in terms of a certain product or category? Consider liberating yourself—it could pave the way for new performance if you defined your business in a broader fashion. Take Apple for example, which dropped the word ‘computer’ from its name in 2007, thereby recognizing that it is not just a computer business. Broadening the definition of your business can open your eyes to opportunities for growth.
Second, dedicate time to understanding your customers really well. Instead of just handing out a survey, visit with your customers to see how they use your product and how they bastardize your product to make it meet their needs. This exercise can really help a business owner develop other ways to meet the customer’s needs.
Third, dissect your wins and losses. When you lose business, smart businesspersons will dissect what went wrong, which is great, but it is much less common for people to think about what happened after a win. Take a few moments to step back and dissect the situation. If you can pin point what went right, you will be more likely to replicate it in the future.
And finally, appoint a chief contrarian. This may sound a little strange, but it can bring great results and cause a leader to think differently. Ask someone already on staff to act in a contrarian role during designated meetings with the job to play devil’s advocate, questioning assumptions, strategies, and new product ideas. In a small business setting, it can be difficult for employees to challenge superiors, but if a leader appoints someone this role, it can make it lot easier for this dialogue to occur.
B: Write down all the beliefs you have about your business. What is your distinct value? What do you believe about your market? Your competitors? How your business needs to run to be successful? Now turn around and question all of your beliefs. Could you do something in a better way? Is there proof in your beliefs? This exercise will open your mind to other options for your business.
Next, talk to your customers, especially the ones who didn’t buy from you or are mad at you. Ask them what you can do better, what isn’t working for them. Those are the people that will tell you what you need to change. Human nature is to talk with happy customers, but it is important to talk with those who aren’t content with your offering—that is where you will find opportunity to change and grow.
After doing this, think about the differences between your beliefs and the complaints of your dissatisfied customers. Take those differences and find ways to bridge the gap. This will help your business evolve.
Continually repeat this process. If you are in quickly moving market, you will need to do this often. If you are in a slower market, you may be able to do it less often.