Today I want you to think about what business growth actually means.
If you’re either;
- In a business,
- A business owner,
- Part of a management team,
- or you’re in the personal and professional development world.
Then growth is a term that you’re going to have come across a lot, particularly in the terms of business.
But what does business growth actually mean?
Oftentimes when people are talking about business growth they’re thinking about just one aspect, but there’s actually multiple ways that you can use to grow a business.
It’s not just the most common one that you might think it is.
So what does business growth actually mean? Well it could mean one of multiple things, but this one here is the main one that people think of and talk about when they talk about business growth;
They are talking about revenue.
So when people talk about growing their businesses, it’s often these questions they ask themselves;
- How do we increase our turnover?
- How do we increase how much money is coming through the business?
- How much is coming in at the very top end of the profit and loss statement?
Growing revenue is great, but as I found out in my previous business, we had a phenomenal level of growth when it came to growing our revenue. Some of you may or may not know that we grew from £2.2 million in revenue (turnover) to £4.5 million in turnover in the space of just 12 months!
That in and of itself sounds absolutely fantastic, and in a lot of ways it was and is. It is one hell of an achievement to increase sales, turnover and revenue by more than 100%.
Effectively, we doubled it in just 12 months, which is a phenomenal level of growth!
What we found doing this was, because we didn’t do the homework, the planning, the foundation work, whatever you want to call it; As we grew, the holes, the issues and the problems that we had failed to address in the business just widened and widened. The effect of that was that the money that we made, although we made a lot more money in terms of revenue and turnover, meant that we actually made less money. By that I mean we didn’t make any more in profit. So even though we’d gone from two million to four and a half million in turnover, the profit decreased.
So did we really grow our business?
It depends what metrics you’re measuring them by and what you are looking at.
We were only looking at revenue, so we weren’t really measuring profitability. But our main target was not to increase our revenue by 100% and maintain our focus and maintain a net profit margin of say 10%.
We were completely focused on ‘let’s double our business, let’s achieve 100% growth in revenue.’ As we found out, that singular focus in business growth was a big mistake.
In your growth, what are you focused on?
If you want help staying focused on the right things whilst growing your business, then please do get in touch, I would love to help you avoid the oversights we made as we did the same.