To Grow or Not To Grow – That Is The Question

Our business is all about helping companies grow.To grow or not to grow your business

But there are owners who deliberately keep their companies at around the same size, year after year.

And I don’t think that’s wrong. There are good reasons to support this point of view.

At the other end of the spectrum are the owners who blindly pursue growth.

That can be wrong. Edward Abbey, an American essayist, said, “growth for the sake of growth is the ideology of the cancer cell.”

So where’s the middle ground? What is right?

The answer is, it’s what’s right for each individual.

We’re all different. So, I’d define what’s right as pursuing and reaching the goals each individual sets for him or her self. And, of course, being satisfied with that.

Coming back to Abbey’s point, owners who grow their companies successfully usually have a reason for doing so.

It can be to invent or improve something that will give consumers (or businesses) more quality of life. Some examples that spring to mind are a different way to access music (Apple); air travel at affordable prices (Southwest); a new way to share information (Facebook).

The reason is rarely to make pots of money. That can be the result of growth. But if that’s the only purpose for trying to grow, it won’t work.

Assuming you have the “right” motivation for pursuing growth, how do you do it?

A good place to start is to remember 2 sayings. Never confuse success with a growth market and you can’t cost cut your way to long-term success.

Some companies make the second mistake as a result of making the first.

Then, assuming you’ve got at least one clear advantage over the competition, follow this well-proven formula.

•  First, expand your existing business i.e. sell more of what you have
•  Then take opportunities related directly to your existing business – introduce complimentary products, move into new markets or find new distribution channels.
•  Only after fully exploiting those two, consider moving into new businesses.

Despite what we read in the press, books or on the Internet, some things don’t change. The pace at which we have to adjust and adapt has definitely changed, as have the ways in which we can do that.

But the fundamental, common sense concepts haven’t.

And that’s true of everything in life.

If you enjoyed this post you’ll also enjoy 2 Key Questions Every New Product Must Answer.

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

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Tags: business owners, companies, execution, expand, goals, growth, Jim Stewart, motivation, ProfitPATH, strategy, success

Comments

  1. I agree with your observation that if an owner’s sole purpose of growing is to make pots of money, profitable growth won’t follow.
    Simon Sinek, author of “Start With Why” has really helped me answer the question of whether to try to grow my business. I asked myself why I started my business 30 years ago and whether I still go in each day for the same reasons as before. I am doing what I have always done, only I now involve more people in the process, which I find satsifying. I like people and I like communicating, so if I do this with integrity and purpose with more people, it follows that my business will grow naturally.
    Sinek maintains that if we can’t answer why we do what we do, we will never be satisfied, regardless of how much we earn or how hard we work.
    Second or third generation family business owners would do well to ask why they are continuing in the family business. To earn more money? Due to family pressure or honour?

  2. Jim Stewart says:

    Evan, thanks, once again, for your comment. I particularly like your point about family businesses and will be more alert to it in our succession planning engagements. Jim

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