Balanced Business Growth

Uncategorized

Three Horizons – Are you seeing?

· ·

The ability to see the three horizons can frame the success of businesses owners are aiming to achieve.  

Horizon One

Horizon one represents those core businesses most readily identified with the company name and brand.  The key is on what provide the greatest profits and cash flow. Here the focus is on improving performance maximising the remaining value. 

Horizon Two

Horizon two encompasses emerging opportunities, including rising entrepreneurial ventures likely to generate substantial profits in the future but that could require considerable investment. 

Horizon Three

Horizon three contains ideas for profitable growth down the road – for instance, small ventures such as research projects, pilot programs, or minority stakes in new businesses.

The timeframe should not be interpreted as a prompt for when to pay attention – now, later, or much later. Companies must manage businesses along all three horizons concurrently. The process suggests the cycle by which businesses move, over time, from horizon two to horizon one, or from horizon three to horizon two. Growth in value that companies achieve is by attending to all three horizons simultaneously.

The framework continues to be useful, especially in uncertain times, such as where we are now. The immediacy of concerns around horizon-one businesses can easily overwhelm other efforts important to the future of a company. Leaders can use the three horizons model as a blueprint for balancing attention to and investments in both current performance and opportunities for growth. 

Business Growth Strategies – Part 2 of 2

· ·

In Part 2 we will discuss:

  • The 5 Stages of Business Growth, and
  • Business Growth Strategies

 5 Stages of Business Growth

During growth, all Small and Medium Enterprises (SMEs) go through certain stages of the business life cycle. They encounter specific problems that require different approaches to their solutions. Understanding which stage you are in can make a great difference in the strategic planning and operations of your business. You enter a business life cycle at the moment you decide to set up a business and the beginning stages are almost always full of challenges and business growing pains.

  1. The Development Stage is just the beginning. You have a brilliant idea of starting a new business, and you are ready to take the plunge. You need to test your business idea – perform market research, gather feedback from your friends and industry specialists to understand whether your idea is worth pursuing. If your idea is a breakthrough that should change the existing market, the value of consultation is somewhat limited. You should build a Minimum Viable Product (MVP) to test your idea.
  2. Startup Stage. Your business is legal now. You have developed products or services that your company has to offer and you start marketing and selling them. At this stage, the major problems are obtaining customers and delivering the products or services. The business strategy is simply to remain alive and became viable.
  3. Survival Stage. Now the business has enough customers and adds new ones. The business is generating revenue that helps pay for operational expenses. The company may grow in size and profitability and you may need to make changes in your business model before expanding your business to the mass market.
  4. Expansion Stage. The business is thriving. It’s time to expand and find new markets and distribution channels. You may add new products and services and have rapid revenue growth. The key problems are how to grow rapidly and where to find the money for that growth.
  5. Maturity Stage is final in the business life cycle. The business dominates in its market. The company has enough resources for detailed and strategic planning. If the company preserves entrepreneurial spirit, it can be a powerful player on the market. At this stage, entrepreneurs have two choices: expand further or exit the business.

Types of Business Growth Strategies

There are different types of business growth models. 

In the early stages, your goals are defined by your founder’s philosophy and they are clear. The model for your company’s growth is simple, being business activities that can improve your margins. But when your business evolves to a more mature phase in its lifecycle, you will need to build a strategic growth map that will complement your business model.

Business is a living thing and it has to grow if it’s going to survive. 

There are several common business growth strategies and some may present more risk than others. You can also use a combination of strategies, taking into consideration your company’s size and capabilities. You can test and measure by undertaking two or more strategies to understand what combination works best.

To increase profit, you can employ the following strategies:

  • Improving your marketing with an existing product within the current market
  • Penetrating into new markets
  • Expanding product selection
  • Diversification
  • Expanding through acquisitions

Marketing Improvement

This is the most practical strategy. It will apply to most small and medium-sized businesses. Most entrepreneurs are biased: we fall in love with our product and our marketing communication. Sometimes, the truth is: the target audience doesn’t have the same feelings about what we do. The main goal of this strategy is to challenge ourselves on the choice of messages, user flows, and marketing channels. You need to accept the fact that even though you have worked in a market for a long time, you might not know all your customers’ needs and the reasons why some of the customers prefer your competitors. Start with an in-depth analysis of your competitors and learn from their successes and failures. Invest time in Conversion Rate Optimisation (CRO) analysis. In doing so, you will get plenty of ideas for the improvement of your marketing operations. Having an unbiased pair of eyes or some Balanced Business Growth marketing specialists by your side during this exercise to increase efficiency.

Market Development

This strategy involves increasing sales of existing products in new markets. Market growth can take a lot of forms. You can expand sales to a new geographical area – a new city or new state or a foreign country. This can be done via a partnership with distributors with established networks. If you plan to enter a new market in a different country, it’s important to consider differences in local regulations and culture. Well-known brands can do market expansion by offering franchise options to local entrepreneurs. In this way, they can enter new markets with lower risks. You can start selling products online through your own website or Amazon and eBay and reach national and international customers.

Product Expansion

This strategy is also known as product development and involves launching new services or products to the existing markets. SMEs typically use this strategy by offering different variations of their main product lines to reach a large audience. For example, you can develop a premium version of your product for the luxury market segment. This method is a useful addition to any business growth model because it is based on the existing infrastructure. New products can be added by investing in research and development of additional new products or produce a product similar to that of another company.

Diversification

This risky method is known as launching new products in new markets. It can be used as a valuable addition to the existing model. Before you start doing it, you should perform good market research and be ready to invest a lot of money to establish your presence. You will also need to hire a lot of people and build new infrastructures. This method is good for more mature companies with a strong position in their target market. It can be done through mergers and partnerships.

Diversification can be

  • Horizontal –developing new products and selling them to the existing customer group
  • Vertical – when the business enters the sector of its customers or suppliers
  • Concentric – developing a new line of products that are similar to the existing products
  • Conglomerate – developing absolutely new products that appeal to a new group of customers.

Acquisitions

This method is good for mature companies. To expand operations, businesses often purchase strong companies that are already operating in the target markets. The downside of this effective method is steep upfront costs, but in the long run, it’s a cost-effective way to capture a new market or to increase market share. You can get an established customer base and operation which can be adjusted to your specific needs to add value. Besides, the company you buy may be profitable from the first day. It’s a good strategy if you want to expand your business into a new geographic location.

Implementation

Whatever the growth strategy you chose there will be challenges and opportunities.  We, at Balanced Business Growth, are able to discuss the challenges and opportunities of your business growth strategy options and the operational impact of the strategy implementation.  

Motivation – Motivation Pays

· ·

  • Pain may sometimes be the reason why people change. 
  • Getting failed grades to make us realise that we need to study. 
  • Debts remind us of our inability to look for a source of income. 
  • Being humiliated gives us the ‘push’ to speak up and fight for ourselves to save our face from the next embarrassment. 
  • It may be a bitter experience, a friend’s tragic story, a great movie, or an inspiring book that will help us get up and get just the right amount of motivation we need in order to improve ourselves.



With the countless negativities the world brings about, how do we keep motivated?

Try on the tips I prepared from A to Z…

A – Achieve your dreams. Avoid negative people, things and places. Eleanor Roosevelt once said, “the future belongs to those who believe in the beauty of their dreams.”

B – Believe in yourself, and in what you can do.

C – Consider things from every angle and aspect. Motivation comes from determination. To be able to understand life, you should feel the sun from both sides.

D – Don’t give up and don’t give in. Thomas Edison failed once, twice, more than thrice before he came up with his invention and perfected the incandescent light bulb. Make motivation your steering wheel.

E – Enjoy. Work as if you don’t need money. Dance as if nobody’s watching. Love as if you never cried. Learn as if you’ll live forever. Motivation takes place when people are happy.

F – Family and Friends – are life’s greatest ‘F’ treasures. Don’t lose sight of them.

G – Give more than what is enough. Where do motivation and self-improvement take place at work? At home? At school? When you exert extra effort in doing things.

H – Hang on to your dreams. They may dangle in there for a moment, but these little stars will be your driving force.

I – Ignore those who try to destroy you. Don’t let other people get the better of you. Stay away from toxic people – the kind of friends who hates to hear about your success.

J – Just be yourself. The key to success is to be yourself. And the key to failure is to try to please everyone.

K – keep trying no matter how hard life may seem. When a person is motivated, eventually he sees a harsh life finally clearing out, paving the way to self-improvement. 
L – Learn to love yourself. Now isn’t that easy?

M – Make things happen. Motivation is when your dreams are put into work clothes.

N – Never lie, cheat or steal. Always play a fair game.

O – Open your eyes. People should learn the horse attitude and horse sense. They see things in two ways – how they want things to be, and how they should be.

P – Practice makes perfect. Practice is about motivation. It lets us learn repertoire and ways on how can we recover from our mistakes.

Q – Quitters never win. And winners never quit. So, choose your fate – are you going to be a quitter? Or a winner?

R – Ready yourself. Motivation is also about preparation. We must hear the little voice within us telling us to get started before others will get on their feet and try to push us around. Remember, it wasn’t raining when Noah build the ark.

S – Stop procrastinating.

T – Take control of your life. Discipline or self-control lives synonymously with motivation. Both are key factors in self-improvement.

U – Understand others. If you know very well how to talk, you should also learn how to listen. Yearn to understand first, and to be understood second.

V – Visualise it. Motivation without vision is like a boat on dry land.

W – Want it more than anything. Dreaming means believing. And to believe is something that is rooted out from the roots of motivation and self-improvement.

X – X Factor is what will make you different from the others. When you are motivated, you tend to put on “extras” in your life like extra time for family, extra help at work, extra care for friends, and so on.

Y – You are unique. No one in this world looks, acts or talks like you. Value your life and existence, because you’re just going to spend it once.

Z – Zero in on your dreams and go for it!!!

Have you learned your ABC?

Blue, red, yellow ABC alphabet blocks composition. 3D rendering. Isolated on white background.

Risk is the Enemy. Or is it?

· ·

Risk is the enemy.  Or is it?  

If you wish to continue on as you are, or were, to repeat the successes of the past, and the failures, then you will need to conduct business as you have in the past.  Business as Usual (BAU).  This is a low risk option.  Or is it?  

If the markets are different, if the supply chain is different, if the regulations are different, if your staffing is different, then how do you conduct BAU?  

You may ask yourself “Are they really all different?”

If you do conduct BAU then the risk is that you will not be getting as much new business as you did before.  Then again how do you conduct BAU when nothing is as it was before so there is no such thing as usual.  You then have nothing to fall back on.  

You will need to create a new business as usual, which I will call NBAU.  

NBAU does not come at low risk, it is in my opinion just lower risk than doing BAU. If you do decide on BAU then you will create expenditure with reduced income.  Net income may then be zero or less – then what?  

I have been to several workshops, business meetings and informal get-togethers lately where the participants, business owners, were thrilled with the prospect of getting back to BAU.  They spoke of how they were all going to be back where they were 12 months ago without a care in the world. They each convinced each other that their thinking was sound and the world would suddenly snap back to where it was 12 months prior.    

  • Are they right?  
  • Are the ways of the past, that is BAU, a perfect model to conduct business in the future?  
  • Is New Business as Usual needed?  
  • Can businesses all emerge from this global meltdown by wishing for the past?  

These are interesting questions that we each must answer for our own businesses. 

“Risk is the enemy,” you might say. I disagree –

Failure to take Risk is the enemy.  

Risk levels knob button. Wireframe hand turning a risk level knob to the minimum position. Risk management business concept. Vector illustration

Get Regular Free Content