When I look at a business, I evaluate the extent of the growth trajectory (historically and forward-looking plans) as a gauge of credibility.
Demonstrating and planning for growth is an essential activity to demonstrate and substantiate the credibility of strategic plans and tactical actions.
Entrepreneurial business innovation is an enabler centered on creating/retaining jobs, building communities, creating health enhancing breakthroughs, and growing the economy. Yes, this is a big picture view of why business development (for businesses of all sizes) is high on my priority list. Contributing to economic growth is an endeavor with a true purpose. Going forward, these are reasons of equal or greater concern to customer and investor stakeholder communities alike.
Business growth is an indicator of the degree of acceptance of business models in the marketplace.
One of the first things I learned from my experience in the investor community is the importance of year-over-year growth. Year-over-year business growth (not just sporadic growth spurts) is vital to achieving lifecycle durability. Business growth is an indicator of the capability to produce future durable performance. It’s an indicator to substantiate your business’s ability to:
- Prove credibility of strategies and tactics
- Validate marketplace receptiveness of business models
- Substantiate market share success
- Demonstrate ability to outperform competitors
- Add rationale to justify valuation
Business growth highlights what your business is good at.
A growth business generally has the ability to stimulate customer repeat business and customer retention, two strong indicators of resiliency and durability.
A Predictor of the Health of a Business
Business growth happens because of the ability to attract continuous, high-quality sources of revenue, net of customer attrition (called revenue churn). Total Business Growth requires top-line revenue growth, increased margins and the generation of cash and bottom-of-the line profitability. For this reason, business growth is one of the first things to review when taking a more granular look at the extent of business viability. Understanding revenue churn as it pertains to business growth is a key indicator of resiliency and durability.
Stimulating high growth is accomplished by differentiating your business to reflect the realities of the day and of the future.
A Word About Flexibility and Pivoting
To keep pace with these growth requirements, a methodology and a discipline is necessary for your total business and at the grassroots level (e.g. individual business units and organizational departments). Durability requires continual actions to be insightful, knowledgeable and confident in the ability to change direction as required or as planned.
Your ability to extend your business’s lifecycle longevity into the future requires an ability to pursue new opportunities even when confronted with marketplace disruptions, internal business complexities and industry changes, challenges and interruptions.
The greatest challenge your business has is growing to survive into the future. Year-over-year growth is the key indicator of strategic viability needed for survival…based on compelling, realistic and defendable justification.
To ensure future viability, you need to follow the principles of perpetual planning and continuous improvement of operations and marketplace practices, in order to find and maintain a path to durability. This will keep your strategic and tactical planning focus on those items that are important to understand and pursue those things that define the best blueprint to maintain a relevant, resilient and durable competitive edge.
As a starting point, create multiple recurring revenue streams to deflect such things as unplanned competition, economic slowdowns or other forms of business interruptions. In addition, it is important to always be ready to counteract marketplace competitive trends leading to a commoditized business model (e.g. loss of unique identity and easily substituted by customers), which will significantly slow growth – or worse yet, result in a downward spiral.
Perhaps most important, avoid maintaining a legacy business model status quo,
Take advantage of such things as growing the number of channels available to marketers and sales teams, thus improving your ability to continually prospect for insight, understanding and tactical validation. In addition, fill your innovation pipeline with cross-functional input by following an agile collaborative decision-making process where applicable.
Unlocking the resilient potential of your business is the secret to future-proofing your business, which includes finding new ways to attract additional revenue and continually improving operational practices. If your business is not growing but staying within the parameters of your original core business definition, your business is vulnerable to change, challenges and interruptions.