Are you and your business growth ready? (Part III)
In Part I, we discussed you, as the business owner, being growth ready. In Part II, we discussed your business being growth ready. This article is about how to determine if your business model is growth ready.
For clarity, when we say business model, we mean a description of how your business runs, how your business makes money.
So, when we talk about your business model being growth ready, we mean is your business model in the right shape, when modeled either against what the consumer expects from your business or against what are good practices for your type of business.
Here’s the bit we like at 6seed, very often when we review a business model to see if it’s in the right shape, we find marvelous growth opportunities. These are frequently very basic in nature and somehow obvious but we all know the story of “can’t see the forest for the trees” …
- – Review of a light industrial company business model showed online ordering as a major business model gap
- – Review of small supermarket business model showed products with inelastic sales curves were in the best positions in the store
- – Review of wholesale business model showed the need for a website and online ordering
– Review of a retail business model showed that deleted “lines to clear” had more instore prominence than new lines which are priced at full margin
You might think, looking at this list, these are obvious, the business people involved are smart, astute and experienced people, they just hadn’t reviewed their business model from a consumer perspective (light industrial business) or reviewed using good practices (both retail businesses).
These examples demonstrate there are usually easy “wins” for either growth or profit or both when looking at your business
model. These “wins” are often easy to implement solutions for (2 of the business examples above cost labour only). So that’s the first reason to review your business model.
The second reason is that, by reviewing your business model and closing the gaps to consumer expectations and good practices makes you growth ready.
You can’t invest for growth if your business model is not in good shape. You would be wasting your investment.
Let’s consider an example of a retail outlet in high traffic location. Let’s say it’s a big store owned by a corporate business. The training and development of their instore staff is minimal or non-existent or the capability of their managers to ensure training and development programs are adhered to is minimal or non- existent. You probably know of one or two of these type of business’s.
If we implemented a growth programme that attracted more customers to this store and they experienced the poor customer service that this outlet provides, it is very unlikely these new customers would buy anything or even return. The investment in growth is wasted.
(In our experience, the issue with quality of service in retail is very real, little wonder that online retail is winning.)
If you want your business to be growth ready, then reviewing your business model against;
1. Consumer expectations for your type of business 2. Good industry practices for your type of business is essential before you invest for growth!
(See Parts I & II for determining if you and your business is growth ready)
This document is made available for educational purposes only as well as to give you general information about business practices and strategy, not to provide specific business advice. Information provided on the 6seed.com.au website should not be used as a substitute for legal, accounting, real estate, business, tax, or other types of professional advice.