We are approaching June 30 so it is time for reflection and planning. If you’re unhappy with your growth rate in the 2020 FY then apart from COVID-19 there are 5 key things holding your business back. The first one is YOU! You need to surround yourself with people that are better than you are, and then get out of the way.
Get out of the Way
To increase your growth rate, you must let go. The tendency is to hang on to too many responsibilities because you have perhaps always done them, you think no one else can do them as well as you, or you are too tight to employ someone for that responsibility. You cannot scale a business with this mindset. Work out what you need to let go of.
High Performance Team
Once you have worked that out then spend the money and employ only A graders for those roles. You will pay more for them, but they will return that extra investment many times over. Too many business owners have a cost focus when recruiting, as opposed to a return on investment focus. Put A graders in key functional area management and team leader roles, coach them weekly, and watch your business grow. B and C graders will only be a drag on your growth as you will always have to manage them.
Undercapitalised businesses will normally have a slower growth rate, as they are trying to scale using cash flow from operations. It becomes a tail chasing exercise because without sufficient quality assets (inventory, A graders, plant and machinery, premises, vehicles etc) it is harder to get the sales. Therefore, you must have access to sufficient capital, and then focus on and drive profitability, return on assets, and return on capital.
I wrote an article last year on the rule of 3 over 15 (3/15). It basically means that on average there is 3 minutes of lost productivity for every 15 minutes that every employee works. This equates to 20% or 1 day per week, per employee of lost productivity. Add up the lost dollars but make sure your sitting down first. Focussing on efficiency improvements (removing waste) is as important as focussing on growth. You need to resource it.
Vision and Strategy
The last one is vision and strategy. Without a clear view of your desired future state and current state, then every road is likely to be a slow journey, filled with potholes. Now is the time to review and get clear on your strategic direction, your key objectives, and your key strategies to get there.