Regardless of the economy, or the competition, your business must grow over time in order to survive.
It’s not enough for sales to cover the costs of doing business. Your company should operate at a profit margin that is large enough to give you the capital that you need to take advantage of future opportunities for innovation and expansion.
A thorough analysis of your company can help you uncover the obstacles that are holding your business back from achieving its peak performance and maximizing its profits. The following is a brief overview of a few strategies that can help business owners to locate these roadblocks so that they can be eliminated and business performance can be improved.
Focus on Your Business Processes
As startups begin to mature and the business begins to expand, bottlenecks begin to build up that decrease efficiency and increase cost in the organization. As time continues to pass, employee engagement and customer satisfaction begin to suffer, and eventually, profits and revenues become sluggish before beginning to fall.
To break free from this dangerous trap, business owners need to go back to the beginning and focus on all of their processes and look for ways to increase efficiency and reduce costs. Six Sigma Yellow Belt training can help business owners learn the fundamentals of process engineering so that they are able to review their processes, locate errors and inefficiencies, establish controls and improve quality to reduce costs and improve customer satisfaction and employee engagement in the process.
Confronting Your Blind Spots
Regardless of who you are, your background, your past experiences, your education, and even the prior success you’ve achieved, there is a certain level of unconscious bias that affects the decisions that you make. Critical thoughts and other types of false, self-limiting beliefs can prevent you from being able to see the true value and worth that you, and your company, have to offer. These blinds spots hurt your business by preventing you from being open to change and making you hesitant to take the risks that are necessary to create value for your customers and grow your business.
Seeking honest feedback from a trusted confidant or other mentor, and working with a leadership coach are just two of the many ways that business owners can gain insight into their actual performance and begin to overcome the blind spots that hinder performance and growth.
Have You Forgotten Your Purpose?
According to a 2015 Forbes article on the rate of business failures, 90% of startups ultimately fail. There are a number of reasons why businesses fail. Sometimes the company’s founder might lack the ability to successfully run a business. Other times, the business model itself is fundamentally flawed. Companies that lose their focus and forget their purpose are also less likely to survive financial hardships.
Losing focus is a pitfall that is fairly common in the business world. As businesses begin to grow, change is inevitable. Sometimes, these changes fundamentally affect the way that the company does business, and why it even exists. If your business has stopped growing, it may be because you’ve lost sight of your company’s original purpose and values.
Improving performance often comes down to increasing focus on your core business. Unless you and your people understand why your business exists, the work that you do does not matter. Over time the company becomes less resilient to temporary downturns and other external forces.
Investigate if your current mission, values, and business model are still true, and decide whether or not your purpose has changed. Make adjustments to your mission statement and goals.
Taking the time to create a formal mission statement and defining your values and goals helps leaders gain clarity, direction, and control. As the organization becomes more committed to fulfilling the mission, cooperation and collaboration increase, as does employee morale and engagement. Quality improves, performance rises, sales and profits improve, and growth ultimately returns.