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must include scale if you want to achieve it sustainably and consistently. Without scale, next level growth produces turnover growth and operational chaos. It risks failure or a complete erosion of profitability. To get it right, we need to build the business right and by that, I mean the right actions at the right time. Here are some steps you can follow:
Become a specialist at what you set out to do. this means you need to be expert on your product but more than that, expert on your customers. Who are they and what problem do you solve for them? This needs to be specific, both who are they and the problem definition. Whilst corporate clients are the same, they are different. The mining sector buys differently to the hospitality sector for example. Behind the word corporate are functional roles and in them are people.
Depending on your product there will be several functional roles involved in the buying process and each will have different requirements before they commit to the purchase. Behind each function are people. Specialisation means a deep and profound understanding of these dynamics. For more on positioning read HERE.
System of Delivery
Two main business systems should see momentum and fulfilment working in synch. Momentum includes lead generation and conversion or marketing and sales. Read more on this system HERE.
Fulfilment is the operational engine of the business that delivers on customer promises. These systems need to be built to deliver the problem-solving experience defined in your positioning.
Read further on these systems of delivery HERE.
Your team must be employed and linked to systems that they operate. This means that they will be doing the right thing at the right time consistently and through that, the customer experience, because of the systems being well operated, will be equally consistent.
Read more on hiring the right people HERE.
These elements release time for you to focus on next level growth. This is possible because you have achieved scale. Put differently, the business can operate predictably and consistently without your day-to-day involvement. Free time is a measure of scale but only if the business is growing. Another measure of scale is that the growth translates to an increasing profitability rate. With time on your hands, you can now focus on next-level growth.
Get some more ides on how to create more time HERE.
Next level growth
This can be found across several areas:
- New products and services – can you find new products that will “fit easily and well” with your customers’ requirements. Put differently, will these added products go further in solving your customers problems and in doing so add even more value to them. Your decision here must be based on this thinking, not how cool the product looks and feels. In addition, the new product’s impact on your current business systems must be considered. What changes need to be made to these systems? If they are material, avoid it like a plague. Big changes to systems destroy scale because they increase costs and disrupt people. In other words, they bring chaos with growth.
Read an analogy of the epic “Money Fight” and sticking to your business strengths.
- New market segments – the same principle above applies to new markets. A new market is only exciting and viable if you can approach it solving similar problems with similar systems and at the current team’s skill set. Changes to this bring cost and chaos. They erode scale and so pull you back into daily operations. With that, the next-level growth opportunity is gone.
Read more on creating economies where they don’t yet exist HERE.
- Acquisitions – beware, better people than you and I try next-level growth through acquisitions and 84% of these efforts fail to yield growth and value. We look long, hard and deeply at acquisitions before we encourage and support client’s requests in this regard.
In all cases, success in next level growth means that these efforts bring on growth substantially above organic growth rates. Take your growth rate over the last 3 years, average it out and triple it in one year and you are pretty much on point. This must be measured too by an increased rate and level of profitability, the indicators of scale maintained with next level growth.
At Aurik we work very deliberately towards next-level growth with our business owner clients. It’s vital to achieve since evidence of achieving this is critical to maximising your valuations when you decide to sell in the future. Our promise remains “building an Asset of Value” and that means high probability of a premium sale on a clean deal when the time comes for you to hang up your boots. Problem is, a business that constantly gets to the next level is a hard business for the business owners to sell. It’s simply too profitable and cash rich, why would you?