Making Past Normal Growth Curves

Can your business grow faster than the growth of the industry?

Most businesses are faced with normal growth curves which are highly dependent on the growth of the industry, if the industry stalls so do the business, but isn’t this how it is supposed to be?

Not necessarily, but for the majority of businesses especially family-owned businesses this is the tell tale of their life. Till one of them goes out of business, it is very hard to change the trajectory of growth.

In any given industry there will always be more businesses which are happy to be surviving than thriving at a given time. A lot is dependent on the man behind the steering wheel.

But what should be the general pattern of growth if any business wants to break through the industry growth ceiling?

True Growth:

A true growth at any given time should be reflected by growth in both revenues and profits. A lot more businesses focus on either one of them. But a thriving business needs to be growing in both.

If you think about it from an entrepreneurial standpoint, only a business which is making a significant profit and can bank on its natural revenue growth has the ability to reinvest and have the psychological freedom to seek growth.

Entrepreneurial & Strategic Process:

Growth is both an entrepreneurial and strategic process. Entrepreneurial because one has to be always seeking growth in the way an entrepreneur does, ensuring the right allocation of resources, focus, and priorities. And strategic because it involves making the right choices, the most favorable ones according to one's strengths.

Clear criteria for success:

The most fundamental step in the process is a clear definition of success.

If any entrepreneurial opportunity does not satisfy the criteria of successful growth then it is probably an effort in vain.

The naturally growing businesses have extended auxiliaries in the available sales channels, regional adjacencies, product variations, customer segments.

Most businesses just halt their progress in the default business model the start in. Once the minimum critical revenue mass that can sustain the working capital and minimum reinvestment for business is and is met, most entrepreneurs give up …

Growth lies on the auxiliaries which are profitable because that’s where signs of revenue growth exist as well.

Industry business models don’t evolve as much as they should, mostly because they are disconnected with their external stakeholders including customer and suppliers.

In a world driven more and more by the customer. Keeping in touch with the evolving needs of the customers is necessary in order for you to stay relevant in the long term and command a strong market position.

Seek nearness to your suppliers as well, since if they are working in the succeeding value chain and are surviving they may know what’s new, how are trends shifting.

2. Work on a portfolio

If you are just working on market solutions/services/products which are mature in their life cycle, you will be facing a lot of price challenges, margin challenges and cost challenges, you will see a rise in demands and expectations of the customers since they have many options now.

The only way to address this strained situation is to have a product/service pipeline wet all the time that are strengthening core businesses, fulfilling future needs and capturing whitespaces.

3. Capture valuable resources

The economics favors a business which is in possession of rarities. Understanding which resources to acquire and in what quantities is the entrepreneurial part of the entrepreneurial process. If you are a service business it would be more around your business and your service delivery system. If you are a product business it is around the aspect which either enhances the design, customer experience, quality. And if you are a manufacturing business it would depend on the infrastructure that you deploy to generate a product.

But instead of acquiring industry dependent resources, focus on the right mix between people, machine, system/process, capital, and brand.

Invest in building, acquiring or borrowing these strategic resources because they will unlock a horizon of growth opportunities and help you develop a differentiated positioning in the market.

So is it possible to beat your industry odds?

In conclusion, yes you can unlock the potential of your organization to grow faster and quicker than the pace at which your industry is progressing, but it is hugely dependent on your decision as an entrepreneur on what kind of a business you want to develop if it is one that focused on growth then you can follow the guidelines I shared and seek for more such strategies to create growth leverage.

I will keep on sharing more insights…

All the best,

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