Growth doesn’t have to cost gagillions, but it will take time…
And TIME is the one element almost all business leaders underestimate.
It’s easy to believe things happen faster than they actually do. It feels like this is true. Everything is moving so fast, it must be true.
The truth is business growth comes in two speeds: slow and slower.
The expectation of instant business growth results is dangerous. Expecting instant business growth results makes you walk away from good ideas, miss promising opportunities, or waste resources.
You may put off business growth initiatives – you know, the “hard stuff” that requires real change to make a difference – thinking they will roll out faster and have an impact sooner than is realistic.
You may think you have a high failure rate, terrible follow through, or the complete inability to launch new initiatives because all your plans fall through…when the truth is your plans were unrealistic from the start.
You may overspend on an initiative thinking that throwing more money at the effort will speed your results and increase your returns, when the only thing that will actually make any difference is TIME.
So how long does business growth actually take?
The straight answer is, it depends. It depends on what you’re trying to accomplish and how effective you are at getting stuff done. We can’t give you an exact answer on how long business growth actually takes. We can, however, share some averages with you. Using these growth time averages will make your growth plans stronger while keeping your expectations in check.
There are four basic ways to grow your business and all of them require 13 months or more to implement.
Growth Option 1: Sell More Of Your Current Products/Services To Your Existing Customers
Timing: 13 months or less
Selling more of your current stuff to your existing customers seems like the easiest and most obvious move. It is, and it’s one you should absolutely make. It’s also the move with the shortest lifespan and the smallest returns.
Most options in this category require you to make small tweaks and changes to your current offerings. A slight customization here, another there. Any small changes of 20% or less versus what you’re currently doing would fit in this category.
Many times these are customer driven. A current customer calls with a request for a slight change or modification. It seems easy enough, so you do it. Now you have a slightly different offering that may appeal to other customers, so you extend the offering, and so on.
Another business growth option in this category is increasing your throughput/optimizing your operations. This is a great option when sales is not your problem. If you have more orders than you can handle, making changes to your delivery process can can be a great source of growth.
We once helped a client increase their throughput by 30% without adding people or equipment. This change allowed them to win a job with an existing customer that nearly doubled their business. They would not have even bid on this business prior to working with us because they had ZERO capacity for additional work and a huge backlog.
Option 2: Sell More Of Your Current Products/Services To New Customers
Timing: 13-20 months
Beware of this one… Many business leaders will see this as an easy option. A no-brainer.
The truth is this one is easy to underestimate.
It’s easy to think, “there’s lots of customers out there who want what we sell.” The reality is, every buying group is different, so while you won’t have to make a lot of changes to WHAT you’re selling, you will have to make a lot of changes to HOW you’re selling it.
Success here will require you to change anywhere from 20-40% of your sales and operations versus what you’re doing today. You will have to learn about a whole new set of buyers… What are their problems? What solutions currently exist? How do you compare versus those current solutions? What do they value most? You will need answers and a plan for overcoming a whole new set of questions and objections.
You will also have to make some changes to your product to adapt to these new conditions. And, you won’t know what those changes are until you start selling.
Net: if you decide to head down this path, do so with your eyes wide open and your expectations in check. This is not an easy, no-brainer. It’s a challenge that requires dedicated resources and – you guessed it – time.
Option 3: Sell New Products To Existing Customers
Timing: 20-34 months
Option 3 is interesting, indeed. Many believe this to be an easy and profitable path, however, this path must be walked carefully if you want to gather up all your rewards.
Challenge #1 – your existing customers know you and love you for who you are and what you already do. They like you, and they want you to keep doing it. New is risky, and risky can cause challenges. Why change if everything is “just fine.”
Challenge #2 – your existing customers know you and love you for who you are and what you already do! (Yes, this was intentionally repeated. It’s this thinking that usually makes existing customers your least profitable customers.) They want to be rewarded for their loyalty and their support of you over the past XX years. They expect to be treated as special. They expect to get the best deals at the lowest prices, always.
This mentality makes it hard to sell them new products at higher price points. This becomes even more challenging if you’re doing a good job and they are already satisfied.
Option 4: Sell New Products To New Customers
Timing: 34 months or more
The most disruptive, the most risky, and the most profitable option is also the one that takes the longest to execute. Solutions here will take you way out of your comfort zone, and challenge your skills in new and exciting ways.
Not much of your current activity will apply to these options – you’re looking at a 60-100% change versus what you’re doing today. Every department will be effected. New people and equipment will be required. New customers will be defined.
This kind of growth is a struggle for everyone. Small, medium, large and mega-jumbo companies all struggle to make this happen. A lot of companies throw a lot of resources (people, time, money) against this, yet achieve zero new growth.
This. Is. Hard. This is more than innovation, it’s invention. It’s not enough for these ideas to be new to you, or new to your area. These ideas have to be new to the world. They have to be big enough that risking everything makes sense.
This…this challenge is why mergers and acquisitions are so powerful when it comes to driving disruptive growth. Mergers and acquisitions allow you to shake things up without all of the disruption coming from the inside. They also allow you to see the idea is viable before diving in.
How Can You Tell If You’re On A Growth Path?
David Thomson provides one option in his book Blueprint To A Billion™. Thomson studied 387 companies – America’s highest growth companies – for three years. He wanted to know how these top performers turned an idea into a billion dollar business. (Now THAT’S growth! It’s also a pretty good success standard – exponential growth. Revenues of a billion dollars plus would equal success by most any measure.)
Thomson, through his research, actually quantifies the growth patterns of America’s highest growth companies. One of the most fascinating elements – time. Every one of the 387 companies studied followed one of three growth paths when it came to their revenue take-off points – 3, 6, and 12 years*.
So give yourself time. Plan for it. Big growth is a marathon, not a sprint.
Time, Time, Time, Is On Your Side…Yes It Is…
Well, it is if you manage it properly. Knowing how long initiatives actually take (on average) is a big step in the right direction. It can help you make stronger, more proactive growth plans. It can help help you better manage and lead your growth expectations. Time can be a competitive advantage, or it can be your toughest competitor. Use it well.
Of course there will be disappointments and the way will not always be as I expected it.
But if it seemed easy, then that would be the time to worry that I am on the wrong path.
AMEND Consulting specializes in helping passionate business leaders achieve growth. We love “unsolvables” – those “I-just-can’t-make-these-go-away problems” all businesses seem to have, no matter how smart the leadership team… If you’re growing too fast, growing too slow, unable to grow, worried about growth, or paralyzed by the thought of growth, we can help. Let’s connect.
Timing Data Source: Abbie Griffin, The Journal of Product Innovation Management
*3, 6, and 12 years – this is how long it took for the companies to reach their inflection point…that place where all the sudden, all their hard work began doubling, and tripling, and so on. The short-term successes were mostly technology companies…those operating in booming markets, that could move quickly, with little to no capital investment. The 6-year and 12-year curves were the makers and builders…those who needed physical infrastructure, capital equipment, etc. to achieve their success.