How to go from a $2m business to $5m business

04/08/2014
The above is a pretty rich title because I have not done it myself.
In my defense, I have looked at the price to be paid and I have decided that I don’t want to pay that price. At worst I have convinced myself that I don’t want to pay the price when I am really afraid to try; but I am sticking to the former.
Then again, every great coach wasn’t necessarily the greatest player – and all that is required is that you must be a great student of the game.

This post is triggered because I recently read an article proffering the following platitudes that were disguised as advice:

    Build your brand with social media
    Focus on your goals
    Sales and marketing has to happen daily
    Build your company foundation on process
    Employ performing staff

(I don’t want to link to it and give any more oxygen, because I really don’t think those platitudes are helpful at all.)

I equate that type of advice to telling fat people to lose weight or telling introverts to get out there and have more fun. Of course there is an element of truth to all those statements as attested by more than 100 affirming comments.

But if you want to know the real truth, here goes:

Irrespective of anything you do about your business to take it to the next level, several other things must go right over which you have no control:

-        It must be a kind of business that is capable of generating $5 million. That is, there must be a market for whatever it is you are selling

-        Hope that the government does not move the goal posts

-        Pray that a competitor with deeper pockets does not decide to muscle in

You also need some luck. Your timing and environment must work for you and not against you. Luck is often the loser’s excuse, but that does not mean it doesn’t play a role in the eventual outcome of a business venture.
Assuming you have some luck, you will also be making a million decisions a month to take your business in the right direction. You must be very skilled, or very lucky that none of the decisions you take serve to derail your business.
You could easily choose one wrong supplier, choose a wrong web host, adopt a flawed pricing strategy, or implement a promotion that drains cash and delivers no return. This does not mean you are not an entrepreneur or that someone else was smarter or better than you. They simply lucked out by not making the same mistakes. These mistakes are always easily identifiable in hindsight, rarely with foresight.
Now, if you are a bit lucky and you are reasonably competent decision maker then you are in with a chance. If you are already running a $2 million business, chances are that you are doing something right; so the things you must do next are the key steps that will take you to the next level:

    Formulate a clear vision of the new business model. Let me be very clear – your $5 million business is not more of the same, it is different in almost every imaginable way. Understanding your new business model is a pre-requisite because the decisions that follow are about implementing that vision with processes and resources that align everything towards that vision. (Note: a business model is not a business plan.)

    Actively articulate the new mindset that is required to take you ahead. Almost everything that you did up until this point must be thrown out the window and you need to re-think how you do everything. What needs to be done is quite specific and quite radical. You must understand yourself, your default position, and actively identify what needs to change and keep that in mind as you proceed. (I wrote about ‘defaults’ here.) You must really build a new mental model in your mind. (Everything that follows presumes this has happened.)

    Assuming you have the right mindset, you must:

-        restructure your business so that you are made redundant

-        reassign responsibilities and accountabilities among different staff members

-        redesign the processes that govern all business activities in such a way that it can scale to the new level – this is what we mean by saying that you work ‘on’ the business and not ‘in’ the business

    Do the basics well. This should be the easy part, but sadly it isn’t always. Sales. Marketing. Branding. Visual Merchandising. Service. All these are basic processes in the retail environment and the nature of success is clearly understood.

    Implement like hell. Commitment. Drive. Persistence. All these words come to mind for what comes next. It is not easy. Be prepared to fail. But get up, fix it, and move on. There is a price to pay – you will be pushed out of your comfort zone and be pushed out of your bed earlier and more often than you would like, but trust me, if success comes easily then it is just luck. Real success is a harsh taskmaster that demands a steep price of its seekers.

These five steps are arbitrary because you could make it more or you could make it less. The aim is that they are not platitudes, but rather spells out concrete steps that can be taken. You may need help to get there, but with a solid game plan and a bit of coaching its amazing what can be accomplished.

Just ask the Waratahs…

Dennis

Ganador – architects of high performance business

By: insideretail.com.au

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