That’s right! Growth can kill your business. As a self-employed business owner, entrepreneur or solo professional most of you are compelled to seek small growth business.
Small Business Growth: Does The Growth Fit?
In my personal business coaching practice one of the roles I take on for many businesses is that of a marketing business coach. As a marketing business coach I look at how we can promote the business and where to promote it.
If small business growth is not consistent with your core expertise you can be setting yourself up to fail. For example, there was a business that was exceptional at house cleaning. Running a business had been very successful for the owner. One of his customers happened to be an executive with a large grocery store chain.
As the relationship developed the executive wanted the home cleaning business to bid on cleaning and buffing the floors of large grocery stores. Talk about small business growth. To the owner this was the opportunity of a lifetime.
The owner went ahead and successfully bid on the floors for the grocery store chain. Unfortunately, he didn’t have the cleaning expertise and organization to do a good job. The grocery store floors took him away from his core business. Within a year he was out of business.
When you are looking at business growth the first question you must ask is does is fit with what I am already doing? The grass and the money may look greener on the other side. But, getting to the other side may force you into an abyss that you will never crawl out of.
Small Business Growth: Is It Profitable?
As a marketing business coach we must look for a level of profit that will sustain the current small growthbusiness as well as any future growth.
Back in the 1980’s there was a company poised for small business success that came up with a retractable battery cable box. If you were starting your own business this looked like a sure fire idea for business success. For those of us who have used battery cables we know how it seems virtually impossible to put them back in a nice, neat format.
This was an ideal product for small business growth. If small business growth can fulfill a need that no one else is, then the growth can be exponential. In starting your own business there is nothing better than a product that excites a lot of people and is something they want.
This company had it all except their marketing business plan was flawed. It cost them $14.00 to make and deliver the product. They knew to recoup their costs and to have the correct profit margin that they would need to need to have a wholesale price to retailers of $24.00.
They had only one marketing strategy. They wanted to be in Walmart. They figured that if they had distribution from Walmart that they could become wealthy quickly. They went to Walmart and Walmart loved their product.
There was only one problem. All Walmart was willing to pay them was $16.00. If you have ever worked with large chains, unless you have built a demand before you go in, they will tell you what they are going to pay.
This company accepted Walmart’s terms and figured that somehow they could make it work. Running a small business and seeking small business growth on a hope and prayer doesn’t work.
The company got its original shipment to Walmart. It sold well. The problem was that they weren’t making enough profit to sustain their business. Within six months they were out of business.
Small Business Growth: Grow With Care
As a small business coach my most successful clients have grown with care. They have a marketing business plan that makes sense. They have grown in alignment with their core business.
They have a profit structure that will enable them to grow and survive. And, they refuse, no matter how enticing the prospect of small growth business, to be seduced into compromising their profit principles.