Growing your business: The single, most important thing.
As previously published in Austin Business District Magazine
There are many issues that affect whether or not a business grows. While some factors are beyond management’s control, most are well within our ability to harness and manipulate. Small businesses face particular challenges when it comes to growth including limited capital and a lack of manpower. However, in my experience, the single, most important factor that’s inhibiting growth for small and start-up companies is the lack of a real marketing and sales strategy.
The Slot Machine Theory
The nature of the problem is not that these companies don’t know what to do – they know that the key to survival is sales. So they hire some sales people, throw up a web site, create some brochures and start taking meetings. This methodology works just enough to encourage them to continue with the status quo. The idea is similar to slot machine theory: dole out just enough reward to keep the user playing but the odds of a real pay out are slim to none. So how does a company with limited resources deploy a strategy that hits the jackpot? The answer is so simple, I’m almost afraid to tell you. In fact, it is at this juncture that I must warn the reader that I’m about to use a dirty, scary word: Small business needs to engage in true (here comes that word…) planning.
You can’t know what you don’t know
I’m not saying that small companies don’t plan. Some do. The real issue is that most use a flawed planning process. The process goes something like this: company executives schedule a strategy planning meeting. At this meeting, the team might do a SWOT analysis, define some sales goals, identify low hanging fruit and generally meander through the details of the business. Assumptions are stated as fact, arguments ensue and the result is usually a spreadsheet with blue-sky projections and best guesses. The result is neither strategic nor a plan. It is, at best, a one-sided best guess with little thought to actually implementing the strategy.
A better way
The real power in planning is not contained in the resulting plan, but in the process itself. In order to create a plan that has real value to the organization, the process must be systematic, objective and thorough. For many smaller companies, it makes sense to bring in a professional facilitator who already has a process and who is experienced in helping executive teams systematically and objectively analyze the business. After completing this process your team will be able to identify any gaps in information, assumptions masquerading as facts and any other issues that may render the strategy ineffective. This leads us to the next critical step.
Assumptions versus facts
The biggest problem with most planning processes is that they are one sided; developed from the perspective of the company. For a marketing and sales strategy to be effective, it is important to reach outside the organization to confirm assumptions and answer any critical questions that cannot be answered during the planning sessions. This research phase doesn’t have to be expensive – for smaller companies, simply taking a select number of clients to lunch and asking good questions will suffice. Another way is to contact trade associations for up-to-date statistics on the marketplace. The idea is to make sure your critical assumptions are factual.
The finale
Once you gone through the process, done the research and analyzed the data, the strategy will become obvious. However, this ten thousand foot view must now be hammered into actionable tactics (segmentation, messaging, communications, sales processes, etc.). Each tactic must be scheduled and developed in detail to ensure implementation. After all, if you don’t implement, all the planning in the world won’t save you.
There are many issues that affect whether or not a business grows. While some factors are beyond management’s control, most are well within our ability to harness and manipulate. Small businesses face particular challenges when it comes to growth including limited capital and a lack of manpower. However, in my experience, the single, most important factor that’s inhibiting growth for small and start-up companies is the lack of a real marketing and sales strategy.
The Slot Machine Theory
The nature of the problem is not that these companies don’t know what to do – they know that the key to survival is sales. So they hire some sales people, throw up a web site, create some brochures and start taking meetings. This methodology works just enough to encourage them to continue with the status quo. The idea is similar to slot machine theory: dole out just enough reward to keep the user playing but the odds of a real pay out are slim to none. So how does a company with limited resources deploy a strategy that hits the jackpot? The answer is so simple, I’m almost afraid to tell you. In fact, it is at this juncture that I must warn the reader that I’m about to use a dirty, scary word: Small business needs to engage in true (here comes that word…) planning.
You can’t know what you don’t know
I’m not saying that small companies don’t plan. Some do. The real issue is that most use a flawed planning process. The process goes something like this: company executives schedule a strategy planning meeting. At this meeting, the team might do a SWOT analysis, define some sales goals, identify low hanging fruit and generally meander through the details of the business. Assumptions are stated as fact, arguments ensue and the result is usually a spreadsheet with blue-sky projections and best guesses. The result is neither strategic nor a plan. It is, at best, a one-sided best guess with little thought to actually implementing the strategy.
A better way
The real power in planning is not contained in the resulting plan, but in the process itself. In order to create a plan that has real value to the organization, the process must be systematic, objective and thorough. For many smaller companies, it makes sense to bring in a professional facilitator who already has a process and who is experienced in helping executive teams systematically and objectively analyze the business. After completing this process your team will be able to identify any gaps in information, assumptions masquerading as facts and any other issues that may render the strategy ineffective. This leads us to the next critical step.
Assumptions versus facts
The biggest problem with most planning processes is that they are one sided; developed from the perspective of the company. For a marketing and sales strategy to be effective, it is important to reach outside the organization to confirm assumptions and answer any critical questions that cannot be answered during the planning sessions. This research phase doesn’t have to be expensive – for smaller companies, simply taking a select number of clients to lunch and asking good questions will suffice. Another way is to contact trade associations for up-to-date statistics on the marketplace. The idea is to make sure your critical assumptions are factual.
The finale
Once you gone through the process, done the research and analyzed the data, the strategy will become obvious. However, this ten thousand foot view must now be hammered into actionable tactics (segmentation, messaging, communications, sales processes, etc.). Each tactic must be scheduled and developed in detail to ensure implementation. After all, if you don’t implement, all the planning in the world won’t save you.
posted by Pete Monfre at 2:02 PM
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