If you’re a small business, you’ll know it’s a cut-throat world out there. It’s so competitive, in fact, that 80% of UK businesses fail within their first year – not a very promising statistic, we know!
But, success is possible, and the remaining 20% who succeed prove that. It’s tough, no doubt, but if you have the guts to keep going and the knowledge to respond to market changes, you’ll start to drive growth into your business and get through that first year.
Of course, it does take more than guts and knowledge; you also need time. It’s so common in business for CEOs to spend their time handling day-to-day tasks and fighting against the endless stampede of issues that arise. But there never seems to be the time to focus on real growth.
So, what does that 20% do?
Why Is There a Problem With Focusing on Business Growth?
It’s actually a very typical situation. It’s common that a company will grow from the top down, with the CEOs structuring their business without a solid, long-term plan in mind. As the business grows, they hire more staff and hope for the best.
This usually means hiring for the department that makes the most noise for new employees. It’s not an orderly, methodical method of growth. It’s lumpy and full of sudden growth spurts all over the place. The key to seeing success is how you manage those spurts.
If you’re serious about driving your business beyond what you can directly manage, resourcing it should be strategic and not dictated from the bottom up.
Where Should You Start?
If you’re ready to kickstart growth, you need to identify the correct functional structure for your company. It should allow you to step back from an active, operational role and maximise your employee’s talents. You’ll also want to be operating at maximum profitability, of course.
So, you have to look at which job activities and functions are necessary before allocating roles to the most skilled and experienced people. This could be someone who is currently working in another area of the company, which is absolutely fine. Shuffling a business around isn’t a bad thing.
How Do You Find Your Priority Areas?
All of your activities will probably fall into one of three groups. This isn’t definite, but we’ve found it works for most businesses.
These groups can be colour coded as red, blue, and black. By colour coding, you can quickly plot where most time is spent in your company and then match that against where the company actually needs to be spending time.
Red activities support the infrastructure of the business but aren’t generating revenue—for example, IT, HR, and finance departments.
Blue activities all generate revenue and are related to the customer. This can include anything from making and selling, to delivering and servicing your products, as well as any marketing efforts.
Black activities are any functions that help business growth, including leadership functions like developing culture and setting the company vision. They also include contextual areas focused on more long-term growth, like working on your market positioning, new product strategies, and merger activity.
Too often, business owners get caught up in the red and blue activities and forget to focus on the black activities that drive the business forward. Sorting out IT issues, planning for the offices to be redecorated, and handling stock functions aren’t black functions, and the CEO shouldn’t be spending time on them.
By colour coding your week in red, blue, and black, you can understand why you’re so stressed. It should also highlight why there is never enough time to grow your business. Of course, it’s important to carry out red and blue activities, but they shouldn’t take up 100% of your and your employees time.
It’s easy to engross yourself in red and blue, but these aren’t the activities where you can add the most value.
How Can You Use Red, Blue, and Black to Create More Organised Structure?
Once you’ve colour coded your activities, it’s time to look at the next tier down – and then the next, and the next, and so on. What are your staff doing? Once you know, you can create an organisational structure that suits your company at its current growth stage by assessing which activities you’re doing are needed. Then, you should allocate roles to the most appropriate staff and empower them to take on the new responsibilities.
To make this work, you’ll probably have to rewrite all of the company’s job descriptions. You then need your staff to take ownership of their new role. The owners and directors in the business should learn to delegate and trust the team to fulfil their roles.
If you can do these things, along with identifying a clear vision and creating a strong culture, you should see pride amongst staff increase and performance improvement. As a result, you’ll have a more functional company where every activity is given the attention it needs, and growth isn’t forgotten about.
We won’t deny that putting this kind of system in place takes time. It’s challenging to achieve a fully functional business, especially with no outside help. You may have false starts along the way, but when you do get it right, you’ll see considerable benefits.
If you think you could use some help implementing these ideas, we’re here to help. Our team is here to help you grow your business by prioritising the most important activities and making sure you, the owner, don’t forget where your value really lies. If you’d like to learn more or start working with us, get in touch today. When it comes to growth, we’re always ready to talk!