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Is Your Business Slowing Down? Step It Up!

March 7, 2013

Daily ReadIs Your Business Slowing Down?  Step It Up!

Growth was great when you first started, but if things have started slowing down and you’re questioning if you should allocate capital and resources to create sustainable growth then maybe you need to take another look at your priorities.  Start-ups focus on invention and momentum but as you grow your focus needs to change. Here’s how –

  1. Create a Profitable Business Model. While this may seem obvious, it’s not unusual for a growing business to move away from this mindset. Most businesses have products or investment opportunities that require redirection of would-be profits and resources that can easily drive the business into negative territory. Having a “profitable” business model helps you direct those funds into profitable growth.
  2. Take a 3 to 5 Year View of the Business. Focusing on a calendar year P-L can be a distraction from growth. Short term metrics are important, but the 3-5 year time horizon is necessary to play out your business strategy.
  3. Build an 80/20 Portfolio. The most successful growth businesses focus 80% of their resources on the core business and 20% on new, innovative opportunities. Additionally, investing in ways to better serve your most profitable customers usually leads to more profits rather than less.

It’s also important to invest in adjacent markets, customers, and products where you can leverage your core strengths. It is these adjacency investments that lead to future growth. Companies that do not invest in adjacent opportunities are destined to see their growth slow over time. Identifying adjacencies allows you to build your next growth horizon.

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  1. Straight and to the point good advice. Businesses without a route to profit are just a hobby. Nick Holzherr once told me he believed multiple revenue streams might be the best way to build a decent profit margin.

    80/20 analysis is always a reliable tool and whilst now fairly widely known, it’s still far too underused.

    In the interest of talking innovation maybe you’d like my post on Seth Godin’s purple cow? Why marketing is now dependent on innovation.

    Good post! Cheers.


    • Thanks for the feedback Mike! I’m glad you found the post helpful. Your post sounds interesting!


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