Design your Business for Growth
- There is not a successful Bridge builder in history that started construction before knowing how wide the river is and how big the bridge will be.
- The height of every sound building is determined by the depth of the foundations.
- The eventual size of every business is determined by the way its service or product is designed initially!
With these facts in mind, how many small business leaders have aspirations to create a large business, but set out on a strategy destined to consign them to a corner shop forever, or at best a number of corner shops where the costs increase linearly with sales.
Design your Business for Growth
The business model that depends on the skill of the individual for a bespoke service to a customer is destined to grow only to the number of people that craftsman has the hours in a day to serve. Consider a physiotherapist, a dentist, a hairdresser, a photographer, an artist, a sculptor, all potentially remarkable talents who at the top of their profession can attract very high prices for their services, but they can never grow beyond their personal ability to serve the customer.
Immediately the argument grows, what about hairdressers whose names have become worldwide brands, and that leads to precisely the point of this article.
Great brands built on the reputation of an individual set out to ‘not cut hair’. Instead they built a reputation and a trademark that could be applied to products which were themselves scalable. In the time that one person’s hair could be cut, millions could use a hairspray adorned with the name of the artist. That business set out to be brilliant at marketing and brand building, not just good at cutting hair.
Show me the metrics
To retreat to the maths, the most financially successful businesses create products whereby the cost to deliver them to one customer is the same as it is to millions. The trail of success goes down and down to the unskilled labourer who can only do one job at a time and even that is valued poorly by the customer.
These issues are obvious in hindsight, but the lesson for entrepreneurs, and those seeking to grow their businesses, is that they are also obvious in advance. Are you seeking to be a ‘Microsoft’ were the massive development cost of the next version delivers a product that can be used at no incremental costs to millions … or to be legend in the locality for perfect decorating?
Lessons to learn
The lessons abound in common household names. B&Q have the ability to sell great bathroom products, they compete with emerging web based organisations and independent retailers for their share of the consumers spend. They have no constraints on the size of their ambitions until they add in the related “installation service” … now their scale is limited to their ability to source competent plumbers and their cash flow constrained by the lead time for installation. They have built in a service they cannot scale at the same rate as the remainder of the business model.
The internet has revolutionised scalability. Modern communications have increased our ability to reach mass markets. It is vital to understand that, if you wish to design your business for growth, you need to have a clear ‘value added component’ and to ensure that other features are not added that then limit the scope … or conversely that expensive efforts to market and communicate are not simply rendered valueless by the inability to scale.
If you’re serious about growth, seek out professional help and support – growth can be built into any business with enough planning.
Yorkshire Powerhouse thoughts on ‘Design your Business for Growth’
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