It seems like a silly question. After all, who doesn’t want a company worth millions of dollars? But growth is something that should be given special attention. Especially if it’s happening rapidly.
Business growth: positive or negative?
Growth is any company’s main objective, but whether this is something positive or negative is challenging to determine. It indicates that something is happening and should not be ignored but if this acceleration is due to outliers rather than consistent processes, it should not be used to assess the company’s health.
And, while increased revenue is essential for a company, this is not the only aspect to consider when you think about your business. The real health of a company can be found in its ability to adapt to new circumstances and conditions. The business environment changes continuously making it essential to have a system or process that will allow you to respond quickly in order to survive as well as thrive.
What should we focus on?
- Look at your numbers: The analysis of your numbers is critical, but it must be done using the correct values. Try to avoid the mistake of measuring growth by the amount of income earned in a given period. Instead, use profits made. [Income less Expense]
- Control and monitor the business model: You may be stuck under a business model that is no longer profitable and does not adapt to market demands. For any business to ‘remain’ successful, it must implement a business model that’s adaptable.
- Speed of communication: Bureaucracy has been the cause of extinction for many organizations. It tends to create a blockage in communication when the speed and fluidity of communication between employees and other stakeholders is essential. As an example, current statistics on bankrupt companies indicate that managers did not listen to those in the positions that were actively processing or using the information and could have alerted them to these issues before they became problems.
- Audit growth processes: This should be an ongoing priority for any business. In fact, larger companies will often have a position dedicated to business process modeling and auditing. They’ve learned that this is how you grow while, keeping you ever aware of problems as they arise and allowing for more immediate solutions.
The Model for a Healthy Company
So you see, business growth is not so much about how much income you have but about the actual health of your business model. If we keep our processes consistent, we can better guarantee their long term success. So remember, a massive change, even one that results in an increase in income, isn’t necessarily a positive thing if it creates a false image of profit or success.