Many of the successful things that happen in our businesses come from strategy and planning, but it’s the habits and mindset behind this work which really drive success and growth.
This article identifies five winning business strategies and leadership habits, which are absolutely key to unlocking strategic growth - no matter what the economic climate may bring.
1. View everything as a business growth opportunity
When we hear the news that a recession is coming or an economic downturn, we can't help but label that as something ‘bad’. However, for successful companies, the trick is to try and view everything as an opportunity.
When something happens that you might previously have thought was bad news, start thinking about how you can turn this into a competitive advantage and build it into your growth plan, despite the tough economic times.
How to react to bad business or economic news
When receiving news which could be perceived negatively, immediately take a deep breath. Ask yourself the question; How can I make this, the best thing that’s ever happened to me?
Even if there are tough decisions to make, how can I make sure that my business can endure and grow during uncertain times? That mindset of seeing everything as an opportunity to thrive will help you get through the coming year in the best possible shape.
How can I think about growth in tough times?
You should also try to stop, think and plan - try and build that into your daily routine. If you are running around and busy with the day-to-day, you simply won't have the time and space to see these strategic growth opportunities that might be right in front of you.
The impact of setting aside designated time to solve problems and make decisions will be felt across the business, no matter your size. It will help you focus on achieving growth and developing your growth strategy.
2. Do less
The tendency we have when things are challenging is that we work harder, we run faster, and we do more. The danger with that is if we get bogged down with the day-to-day, we’re not doing the stuff that matters. Growing your business isn't always about working more - it's about working smarter. This breaks down into two parts:
- How you can do less but still achieve growth
- How the business can do less but still be profitable in uncertain times
How you can do less?
Let's start with how you can do less. The people who are most effective at growing their business, are the ones who reduce the number of decisions that they need to individually make.
As you grow and build your team and capability, you should be reducing the number of decisions you have to make and pass them down to other people. It's really easy to hold on to some of the stuff that you used to do, but for you to be the most effective, you need to be doing only the things that only you can do.
Ask yourself, do you need to get involved in this or, is there someone else able to do it? Do I even need to see this? Once you see something, it's very hard to unsee it and you start pulling on a thread.
Before you know it, you’re involved in stuff that you really don't need to be - and suddenly you've wasted that time. It's prevented you from doing the things that matter. Reduce what comes across your desk, so that they can move out the door and just happen.
The other thing to question is, when you're getting involved in things, are you making a significant difference? If you turned your hand to almost anything in your business, right now, you could make it better, right? But that doesn't mean you should turn your hand to everything. The whole point of building a team is that you can leave them to get on with it and do a great job.
If there's no one with the right skill set to help you, then this is an opportunity for you to build capability within your team.
Train someone up to do this task, so that you don't need to be doing it over time. It's essential to take the long view. Yes, it’ll solve the problem right now if you just do it, but if you don't want to be doing it over and over again, you need to put the extra effort in to build that capability to train that person or hire in new skills.
No one wins when you are bogged down doing the day-to-day. We know that one of the biggest challenges facing business owners right now, is working in the business instead of working on the business.
How can the business do less?
There are also two key areas where the business can do less:
- Say goodbye to your least profitable clients. If you’re holding on to unprofitable clients and losing money on them, what's the point? Free up your team to focus on the ones that can generate the most profit.
- Stop offering certain unprofitable products and services, and focus on where you can make the most difference to your clients.
- By developing a focused skillset you can streamline your business, giving you more time for the work that has the best margins.
3. Measure more
Measure more often, in more detail, and with more diligence than you've ever done before.
Now is the time to have your finger on the pulse. As we go through a period of economic uncertainty, you don’t want to be flying blind. This is not the time to be winging it.
What do I need to measure in my business?
You need to understand the numbers in your business, understand what matters, and be able to have the intelligence so you can make swift decisions well. This is critical to your success for the year ahead. Ask yourself these questions:
- Can you measure profit by project? If you're a service-based business, and you look at your project profitability, are you able to project by project, show whether you're making money or not in real-time, and see whether you're on track so you can correct it if not?
- Can you measure your profitability by customer? Do you know which are your most profitable and least profitable customers? Can you produce a league table?
- Can you measure your profitability by product, or by service? Do you know exactly how much margin you make on each department or product line? And do you have that information at your fingertips?
What retrospective and predictive measures should I look at?
You should be looking at the following retrospective measures and predictive measures in your business:
- Retrospective measures include your management accounts and money in the bank. They tell you your profit and loss, all of the sales that you've done, the invoices you’ve issued and the cash that you've collected for that particular month, or that particular year - it's a history lesson, it tells you what has happened.
- Predictive measures are metrics that will tell you what your performance will be like in the future. If you have a good month now, that's not because of things that you're doing now, it's because of all the things that you've done previously. It's the predictive measures that are going to be the key determinant of your success.
What are the key metrics for future growth and success?
Think about what metrics are key to your future success. Looking at early sales indicators for example, it might be the number of people added to your email newsletter, social media engagements or people downloading a particular piece of content.
It might be a number of commerce, such as networking events you've attended, conversations you've had or booked sales calls.
Those metrics are all the things which happen before a sale, yet they're indicators of what those future sales are going to be in terms of conversion rates and average client value.
Building metrics for sales growth
When you put all of these metrics together they build a picture of what your sales are going to be over the coming months. If you can work out the ones that are key to your success, you will have a glimpse into the future that your competitors don't have.
That glimpse into the future will allow you to see opportunities coming and make sure you have adequate resources in place. Making those decisions before you need to make them is really important and gives you time to do it in a controlled, methodical, and thoughtful way.
4. Spend more time on sales and marketing
When a recession or an economic downturn is coming you’ll read a lot of advice telling you to conserve cash and focus on retaining your customers and looking after existing customers.
These are defence tactics, which do have their place but there’s a lot to be said for going hard on the offensive - for pursuing a real growth strategy. Especially if others are standing still.
A great way to sell through whatever comes next is to pick up so much work that you don't even notice that there's a recession. The key to that is to spend more time on your sales strategy and your marketing strategy.
The number one challenge right now for every type of business is winning new business, opening up new markets and new customers and potentially winning new market share. In difficult economic conditions, businesses often say “it's hard to get prospects' attention”, “there are not enough leads coming through”, “budgets are too small and decisions keep getting delayed”.
However, when this is the case, it means we're not spending enough time on new business and on market development. If we can spend more time on this, we're going to find more opportunities and more leads, and we're going to get more prospects' attention. Eventually we're going to increase our cashflow and our profitability.
The keys to unlocking strategic growth
- Hire some sales and marketing resource. If you want to spend more time on it but don’t have the capacity, you can outsource the problem. If you’re not in the position to hire someone full-time, or even part-time, there are a ton of brilliant sales and marketing, freelancers and agencies that you can bring in to help with this.
- Develop a sales culture to get your whole team involved, so the workload is shared and owned by everyone. You might night not need a sales team - you just need everyone to have a business development mindset.
- Remember that doing nothing is not an option. If you do nothing your growth strategy will fail.
Habits to help momentum
One of the key areas for growth is right under your nose. Get really good at generating revenue from existing clients. These habits will build momentum, create energy, and make a massive difference:
- Grade your clients. Work out how much revenue you're generating from your top 10 clients and make individual growth plans for them. Make sure that you're spending proportionate time with the ones that are most likely to generate future revenue.
- Implement a referral scheme across the whole business that generates opportunities, and generates referrals from your existing clients.
- Pitch to your existing clients to let them know all the services that you offer, especially if these have expanded since you first started working together.
- Write down your list of your top 10 dream clients you'd love to work within 2023.
- Set weekly bite-sized sales goals, and stick to them.
- This shouldn't be a lonely pursuit for you as the business owner, this should be something your whole team can be involved in.
Help them to understand the power of generating revenue, and why it matters, talk about targets, and communicate progress regularly. Get them involved in this process.
5. Build alignment
Great things happen when we can get everyone pulling together in the same direction. This has to start from the top.
Making sure that you and your business partner or senior leadership team, are all on the same page takes time., But the clearer you can be, the more focused you can be.
The greater alignment you have at the top, the greater the impact on the whole business.
What's going to make the biggest difference to your business?
If you don't know where you need to focus to make the biggest difference, you, your leadership team and the whole business will end up doing stuff, but you're not going to achieve something spectacular.
Focus on something that is inspiring, that makes a big difference and that you can all get behind.
Make sure that you align individual objectives to company goals, so everyone in your business knows what their number one objective is each week, month and year, and how that contributes to the number one objective for the business.
Communication is key
When lots of businesses moved online during the pandemic, many also moved from monthly team meetings to weekly team meetings.
That gave them four times as many opportunities to build in that alignment throughout the year, to communicate what was important and to refocus on the stuff that's going to make the biggest difference.
Keeping up this opportunity for conversation and collaboration is vital to ensure you’re all on the same page.
Nobody really knows what the next 12 months have in store for any of us, but by building these habits into your every day, you'll have a cracking year.
March 24 2023 by Peter Czapp
March 24 2023 by Peter Czapp
March 15 2023 by Wow