What to do when your business seems stuck3 May 2016 Category :
Note: This article also appeared in Entrepreneur Middle East, and can be viewed on the site here.
It’s not uncommon for a business to begin to spin its wheels. For you company owners it will feel like you’re treading water, and while you may not wake up to it right away, eventually it will start to weigh on your mind.
Much of the time these periods will pass, as they may simply be down to such things as seasonal trends or other outside market forces. But when they drag on too long, it could indeed be time to make some significant changes, because if you are not moving forward in business (and revenue growth is the major gauge of that), you will eventually start to slide backwards.
It’s hard to pinpoint at what rate your business should be growing. That could differ by industry, region, how long you have been established, etc. But a reasonable average across the board would see annual growth around the 5% mark . If you are exceeding that then I’d say you can feel pretty comfortable that your business is moving in the right direction (though perhaps maybe not as great a direction as Google, which recorded average growth of 39% per annum between 2004 and 2014!).
If you are not moving forward in business, you will eventually start to slide backwards.
But what if your growth has dipped, or worse still, has stopped altogether? Many may simply ignore it, thinking not too much about it, happy to still be paying the bills. But again to stress, you cannot maintain flat growth. You will eventually start to slide backwards, meaning your only recourse if you cannot halt and reverse the trend and get back to positive growth is to start cutting cost.
Now I don’t want to go so far as to say that this is the death spiral of a company. I’m not implying that at all. But do see flat growth as a red flag and do wake up to it rather quickly. Because it’s time for a change.
With that in mind, let’s take a look at what that might look like in the form of eight things you can do to get your company “unstuck”.
1. Get properly involved again: As a first step, it’s time for you to consider if you’ve maybe put too much distance between yourself and the day-to-day company operations. Believe me when I tell you that there are millions of company owners out there who have done just that without even realising it. It can happen very gradually over the years as your key hires have gotten things firmly under control. Now no problem with them having things under control, but if reporting to you gets lazy and you have yourself become accepting of that, you no longer are in a position to say what is best for the company because you are leading somewhat in the dark – which means you are only partially leading. Get control again. You are needed.
2. Hike your prices: Sorry, what? Yes, I know, it may seem a bold move, but upon closer look it might be what is missing. One reason companies often find themselves stuck is because they are working off of outdated prices. You may still be enjoying top line growth as you continue to expand the business, but if the bottom line is painful, you won’t be feeling like much of a success at all. Those prices you set five years back may not give you the flexibility to cover the costs of today while taking a fair profit. Salaries, rent, cost of materials – they’ve all risen over the years. But if your prices have not, then you’re playing a game you can’t win.
3. Promote the pants off of things: It simply amazes me how many companies actually don’t do any sales and marketing at all. Seriously amazes me. Are you one of them? Listen, if you don’t believe in cold calling or you don’t believe in networking or whatever else it takes to bring in the business, it’s time for a reality check. Here is a stat for you: 8% of salespeople generate 80% of all sales. What does that tell us? It’s very much about effort. And beyond sales, yes, you have to invest in marketing. Make sure you have the basics in place, and do dive headfirst into digital – which is what it is all about now. If you don’t have the budgets to work with an outside digital marketing agency, no problem, but do find a way to get it done in house. Learn what you must (it won’t take you that long). Just do me a favour: Stop telling yourself or others that the business will come to you. It’s almost never like that. You want it, then chase it.
8% of salespeople generate 80% of all sales.
4. Take a close look at your customer needs: Too much complacency with respect to your offering will lead to your clients getting restless as their wants and needs are not quite being met like they once were. One of the key things then to look at when you start to sense your company is stalling is the products or services you are bringing to market. And this is something that should anyway always be on your list of main entrepreneurial to do’s, because if you are not constantly evolving your offering in line with your customer needs and the overall market needs, you’ll start to become obsolete, and with that comes reverse growth. The solution is a pretty simple one: Speak to your customers regularly.
5. Scrutinise your key people: Are you ready to make the hard decisions? When company growth stalls, one such tough decision could involve a close review to find out if the key people in your company are doing the job they need to do. And that also means putting yourself under the microscope. As company owner your best days may be behind you, and if so it’s time to move up to the role of chairman and bring in someone else to manage the leadership role. Now probably that is not necessary, but what may well be needed is to take a look at the key management positions in your company and see if fresh talent is needed. As harsh as it may sound, cleaning house is often necessary to put the wheels back in motion.
6. Reshuffle the pack to build healthier levels of motivation: In tandem with point 5 above you should also look to see if the right people are in the right roles. Many times over the years I have found myself with some great talent on board who were in fact performing duties which were not the best fit for their particular set of skills. Ask yourself if some members of your staff could be better utilised elsewhere, or if small (or not-so-small) tweaks to the job duties they are performing could make a big difference to overall company performance. A recent study out of the US revealed that nearly three-quarters of employees feel they are not fulfilling their potential in their current role. And that’s a monster stat when you consider this one with it: According to Dr. Stephen Covey, in his book “The 7 Habits of Highly Effective People”, the difference between “poorly motivated and highly motivated employees is about 500% in productivity.” Put your team to the best use, and those motivation levels could shoot through the roof. And no doubt that would help any company which has suddenly found itself in the flat growth zone.
The difference between poorly motivated and highly motivated employees is about 500% in productivity.
7. Hit the books: The most successful entrepreneurs tend to have something in common: They love knowledge, and they know how to select the right intelligence to apply from the sea of information that is out there. When your company growth has stalled, it could in fact be due to you falling asleep at the wheel in this regard. Are you still keenly aware of what is happening in the markets? Are you addressing challenges you face on, say, the managerial front or the finances front or the sales front by reading books on these topics or even attending courses?
Also worth pointing out here that such learning and education does not have to be limited to business topics alone. Read about psychology to get a better understanding of yourself and others; read football coaching books to get a different perspective on leadership in general; or read biographies of history’s greatest men and women to get an appreciation of how they overcame the biggest struggles they faced.
8. Keep the balance: Last but not least is a reminder that work-life balance is key to performance, and if your workforce is operating at “crazy” on the stress meter, you need to fix that, because growth is tough to come by in an environment where people are too overworked to even think. In a 2015 survey out of the United States, 80% of workers reported feeling stressed at work, and nearly half said that they needed help in learning how to manage stress. One thing I’ve observed over the years on this front is that well organised companies seem to have far lower levels of stress, because people are generally working within a framework that affords them a feeling of control. Stress often comes from having too much on one’s plate, which in turn leads to a feeling that one is constantly behind on tasks. And that feeling of “being behind” on things is in fact one of the biggest causes of stress for us humans. The end result is a workforce that is always reactive as it attempts to field the work coming at it at an impossible pace, and in so doing never having the chance to clear the mind and put the brainpower to work in a way that will help your company start building again.
About the author
Neil Petch; Chairman at Virtugroup
With a history of business successes, Neil Petch is well known in the UAE and beyond as a visionary entrepreneur with a passion for helping others establish and grow their own businesses. Neil founded Virtuzone in 2009 and quickly established it as the region’s leading company formation expert, before launching Virtugroup, a holding company that has a wider mandate of supporting startups from establishment; to successful market entry; and all the way through to exit.