This is the 22nd edition of my New Regular series, which is devoted to helping your business survive the rest of 2020 and grow in 2021. Normal was last seen looking for hanging chads in Palm Beach County, Florida.
One of the greatest professional accomplishments is to start a business and grow it successfully. And just now, emerging from the pandemic punch-down, millions of pathologically optimistic small business owners are doing their best to transition from survival mode to growth.
But we all know the post-pandemic marketplace will impact growth differently than ever before. Indeed, many coronavirus veterans are watching their business models being reset in front of their eyes.
Meanwhile, millions more Americans have responded to being unemployed by morphing into that exciting entrepreneurial quark – a startup. And it’s part of my tough-love act to point out that members of this group likely have no concept of what it takes to grow a business.
Consequently, like no other time in my long career, pursuing business growth in 2021 for both a going concern and a start-up will require very similar practices and execution. In that spirit, consider the following growth perspectives.
Unlike a plant or animal, a business isn’t genetically preordained as to how large it will get. For a small business, that decision is made by the owner based on answers to these three questions:
- I want my business to keep growing?
- How big do I want my business to be?
- How fast do I want to get to that size?
There are no right or wrong answers – it’s your business, you get to decide. But there is a paradoxical dynamic at play here: The answers to these questions are heavily influenced by corresponding natural laws that make it difficult for a small business not to grow. Here’s why:
- Entrepreneurs are hard-wired to create more of the business object of their desire.
- The culture of the marketplace encourages, recognizes, and rewards growth.
- The marketplace is nothing if not competitive, and the most prominent byproduct of competing successfully is growth.
But even though there are no right or wrong answers to whether you should grow, there are wrong reasons. Consequently, you must make sure that when you grow your business, it’s because you’ve thought about why and how. Remember, growth for its own sake is organizational suicide.
Here are six articles of faith you must believe to successfully practice the religion of business growth, each followed by a tough-love question and a post-pandemic observation.
1. The marketplace is pretty full already. What makes you think you have a realistic opportunity to grow?
Because of the pandemic, the answer to this question is different than it would have been a year ago.
2. Unless you can drop 25% to the bottom line, growth isn’t self-funding – it must be capitalized. What’s your capitalization strategy to fund your growth plan?
Pushing through to the other side of this pandemic will make managing cash and deploying capital more complicated and require even more financial management competence. Carpenters say measure twice, cut once. You’d better measure three times.
3. The ROI elements of growth are often delayed. If you grow, can your business operationally and financially wait for the payoff?
The acceleration of change – already at light speed, pre-pandemic – isn’t going to slow. Make sure your growth steps don’t become obsolete before they’re paid for.
4. Growth will take you into unfamiliar operational territory. Do you have the staff and systems to blaze that trail without creating a casualty list?
Arguably, this is the toughest question because, pre-pandemic, the right number and quality of employee prospects were already in shorter supply than cash. In 2021, that ratio won’t get better.
And finally, here are perhaps the two most important growth truths to reconcile:
5. Tough love alert: No one is less interested in whether you grow or not than your customers. How do you know if customers will see the benefit of your bigger company?
As we’ve discussed in this series, whatever you thought you knew about customer expectations pre-pandemic is as obsolete as a flip phone. You can’t ask customers what they think about your growth plans if you haven’t reconfirmed that they still care that you’re still in business.
6. Being a business owner should be a source of happiness. Do you know if having a larger business will make you happy?
In a perverted way, the pandemic has helped many small business operators answer this question. It took a pandemic to create the gut-check opportunity to ask ourselves if we want to make a career change.
Believe it or not, many business owners – who either didn’t like their pre-pandemic reality or had gotten into a rut – will use the pandemic as an excuse to reset their future by:
a. taking their business in a new direction, or
b. stop being a business owner and get a job or retire.
Finally, in the true nature of a paradox, for every growth advantage, there’s a corresponding element of baggage. And smart CEOs don’t launch growth steps without coming to terms with both sides of this paradoxical pendulum swing.
Write this on a rock … Successful business growth is not genetic or accidental – it’s deliberate. Even during – especially during – a pandemic