6 Myths of Growing a Business
CEO-type thinking is not what most of us typically do, but it is the kind of thinking we all need to do. We need to step back, get out of the day-to-day, and spend some time thinking about growth. It doesn’t happen accidentally. It happens when there is a plan, execution, and discipline.
1. My margins will improve as my company gets bigger
There is a false perception that success comes with growth. That is not necessarily the case. It takes time for economies of scale to kick in, for reduced overhead to cut costs, for improved efficiencies to drive more for less, and to market to new clients to drive revenue growth. It is far from automatic. It is a lot of hard work and persistence. Growth is good but don’t expect margins to jump just because you grow.
2. The folks running the big companies are smarter than us
Big companies are not smarter but they usually do have more resources. So the reality is that while they are typically slower and less nimble, they often do have much deeper pockets and more cash available which makes their ability to sustain difficult times or transitions better. We often struggle against big dealerships or chains because they can outlast us – even doing the wrong things or a poor job – because they have mass. If managed properly they have a war chest of assets and cash that can help them weather storms that sink much smaller ships. So the key for us little guys is to be quick and nimble and beat them to the punch. That means we must be disciplined again to have someone doing CEO thinking – looking outside the day-to-day box to find the next opportunity – and then directing the ship to sail there ahead of the big guys. It doesn’t just happen by reading a trade rag or going to a conference. Someone has to think about it.
3. The company founder has got to go sooner or later, because the company is going to outgrow them.
Leaders don’t have to be replaced because a company outgrows them if they are willing to grow at least as fast as the company. The problem many business owners have is that they want to do the same things they did when they started. Keep their fingers in all aspects of the business, micro manage their people, make all the decisions, and control all the processes. That does not scale and it means a collision will occur. But if the owner is willing to grow and think differently, there is no reason they have to be replaced. That requires getting some training and coaching just like the rest of the team. It requires setting goals and being accountable. It means doing things differently, but it can be done. It all comes down to a willingness and determination to continue to lead. A leader that does not learn will not continue to lead.
4. As the business owner, you know what’s going on in your business better than anyone else
A business owner who is acting as a CEO should NOT KNOW everything that is going on in the business. That is not their job. The CEO should think of most things happening in the business, provide support for the management team to execute those thoughts, and be the outside influence to keep the company moving forward. But a CEO that knows the business better than his team is not really acting like a CEO at all. This is a difficult transition for most of us to make. We have to move from being the center of the business to the center of the thinking. We have to move to being the center of the connection to the outside, where new ideas and opportunities will come from. But we cannot hold on to the internal knowledge – that has to be passed to the management team.
5. Grow or die.
It is impossible for a company to sit still. You are either progressing and moving forward or falling back. You can’t stay stagnant for long. Growth can take many forms – you don’t have to add staff or locations or products or services to grow – you can just add more clients or go deeper with existing clients. There are many ways to grow, and you need to be growing in some manner. It isn’t possible to stop time and just sit still.
6. Be a self-help junkie
If you want to become a better leader for you company – you need help from others. Books are a great resource to learn new ideas, but it is discussion and sharing with others that brings those to life. There are many ways to do it – for example, joining a peer group like our Bottom Line Impact Groups – but choose your approach and invest in some form of outside input. Combining a community like a peer group with some one on one consulting or coaching to get down to the real nitty gritty is a really great strategy. In every case, the companies that are really knocking it out of the park are not living in a vacuum – they have continual input from others helping them learn to grow and lead.
Are you really growing your company? Or just fooling yourself? How about your life? Many of these same principles apply to life and legacy too. We have to really work at growth if we want to make it happen. The days of growth just happening because we open our doors each day are long gone. It is a very hard task to show continual year-over-year growth in any area. But bottom line is that it is a decision. You have to work hard to make it happen. You have to plan to be successful. It is a CHOICE, plain and simple. It won’t happen accidentally – at least not for very long. I hope you will choose to work hard, plan, and make it happen, and RLO Training is there to help make that a reality in your life and company!