How to double your business revenue every 5 years
It’s not as difficult as it might sound, says Brett Davidson of FP Advance
Wherever you are on your business journey, you need to give yourself some credit for simply still being in business. Building a business is a marathon, not a sprint. So perseverance counts for plenty.
Let me ask you a question: could you grow your business revenue by 10% in the coming 12 months? Just 10%.
What about 15% growth in the next 12 months? Probably doable. And, if you were organised and planned, could you do 15% the year after that as well? I reckon you could.
Do you know what happens to your business if you can simply grow revenues by 15% p.a.? You double your turnover every five years.
If you currently turn over £500,000 p.a. that means in five years time you’d be doing £1M. Then in ten years, £2M.
What goes through your mind when you look at these numbers and think about it for a second? Here’s what goes through my mind:
Why can’t I grow at 15% p.a.?
I can’t see any reason
In fact, if I only shoot for 15% this year it sort of makes it feel doable.
Mighty oaks from little acorns grow
How many businesses do you know that grow at 15% p.a. year on year on year?
Hardly any is the answer. Why do you think that is?
To keep growing after a year or two of that sort of growth means restructuring your business to some extent. You might need to get more of the right support in place, or move people around a bit, or invest in new technology to ensure you can be more productive again in the coming year.
The structure that got you to your first milestone won’t always get you to the next one.
We’re not talking wholesale reinvention here, but the changes are significant enough for most businesses to stall. That doesn’t have to be the case, but for many firms that’s how it goes; they get stuck.
Less pain, more gain
As a business consultant, people tend to come to me when they’ve tried lots of other ideas first. Maybe they’ve even worked with another consultant already.
One of the first things we work on is setting some objectives via the Business Plan; gaining clarity on what the future might look like. Objectives such as choosing a ten-year target – a turnover number for ten-years time.
Most business owners choose a pretty low target. Why?
I believe it’s because their head is telling them, “If it hurts this much to turnover £xxx,xxx, then turning over two or three times that is going to hurt two or three times as much and I’ll die.”
When you think in this way, it’s no wonder growth seems like a really poor option, suitable only for masochists.
What if I told you that turning over two times or three times your current revenue would hurt only half as much as now? A 50% reduction in your current level of pain. For most business owners that would get them back to feeling excited and challenged, and less overwhelmed.
When you get your business sorted that’s what you can achieve. You don’t have to grind it out, suffering the whole way. That doesn’t work. If you’re not careful you might fail long before this harsh approach leads to success. Not a good option.
So how do you do it?
When the going gets tough
There are some tough questions you might need to answer to keep the momentum and move your business to the next threshold
1. Are you accepting low standards from your staff?
As your business grows, so must your team. Yes, that might mean your headcount increases, but team members will need to grow their skills and minds too.
What types of staff do you need on the team in the core positions? They must possess the following characteristics:
• Positive attitude
• Excellent skill levels – they don’t need to be told what to do, because they are experts in their role
• Ability and desire to learn new skills
• Passion for their work
• Initiative and self-motivation
If your team don’t meet this standard right now, it’s not a show stopper, but it might become one as you grow and want to keep growing. You can address it over time by making each new hire better than the last; making sure that you are getting people of the right standard, skill set and mindset.
What you’ll find is that some of your team see the writing on the wall and step up or step off. Either outcome is fine
2. Are you unwilling to sack underperforming/unsuitable staff?
For most business owners there comes a day when you will have to sack someone. It’s awful. It will always be awful, even if you don’t like them and they’ve really done you wrong.
If they are people you like, who’ve been loyal, or are your friends, it’s even worse.
However, sometimes it’s still the right course of action. Decisions need to be made in the best interests of the business. This is just one of the tasks that comes with business ownership.
If you can’t address these issues as they arise, it’s you and your family who will pay the price in the long run. Sometimes thinking about it like that can give you the courage to front up and deal with the issue
3. Do you suffer from lack of planning?
Lack of planning can show up in a variety of ways:
• Not planning each week
• Not planning each day
• Not having a credible Business Plan
• Not communicating the Business Plan effectively to your team
• Not holding weekly leadership team meetings and resolving issues.
Not doing these things means you keep yourself fake busy.
Planning forces you to make choices and that can be very tough. Not planning allows you to pretend you’re on it, whilst never having to proactively choose one thing over another.
Failure to choose is in itself a choice to remain overwhelmed and underperforming. It’s for that reason that I include planning ahead as a courageous and difficult thing to do.
Businesses that don’t plan mistake action for progress.
Start as you mean to go on
So why not start thinking about how you can generate 15% growth in revenues for the next 12 months? Once you’ve done that you can spend your business-planning time next year working out how to do it again.
Let me know how you go.
Visit the FP Advance website