3 Essential Steps To Determine If Your Company Will Have A Growth Stall

We have moved away from Mass Markets to Segmented Market which bear different level of complexity, failing to address them can be costly.

Most companies grow faster in the beginning, and then growth stalls ...For the past 20+ years, we have been working with ambitious entrepreneurs and business owners, and I learned that; if you want to grow your business aggressively, you have to know the growth gap so that you can make strategic decisions before growth stalls.

Most business owners fall into growth stalls because they need to know their Growth Gap.

The Wrong Way Of Thinking About Growth Targets

Here are four assumptions that become a barrier to thinking correctly about growth:

• Thinking that products/services have a growing life that can not exhaust instead of thinking about them as having a lifecycle

• Thinking about their business as one bet that and risking everything to make it work instead of thinking about it as a portfolio of future bets

• Thinking that the future unfolds linearly, just like the growth figures in their spreadsheets, instead of non-linear growth rates

• Thinking that their business is running in a fixed business environment instead of a dynamic environment where things often do not turn out as planned

You can only change a little to think correctly about your growth targets; instead, learn how to calculate your growth gap.

Here's how to do this step by step:

For example, suppose you plan to reach USD 5 million in 3 years.

Step 1: Determine Segmented Growth Rates

Your business is a portfolio with different growth rates over different segments.

Ultimately these growth rates drive growth, but each segment will always grow differently. See which one contributes majorly to growth today and how it is growing. Can it keep growing with that at the same rate? This will help you put weight on the most important bets.

Step 2: Identify Major Assumptions That Can Go Wrong

Most planning is done with fixed assumptions about the future.

Identify the most likely assumptions you are making today that can go wrong. For example, are you overestimating the time it will take to reach there, or are demand rates going to stay the same? Or that the costs will remain fixed.

This will help you see a dynamic world instead of a fixed world where multiple things can go wrong.

Step 3: Model The New Growth Rates

Building new assumptions with their likely impact bring out a different picture.

Put weight on the assumptions and run the model with these assumptions and their limiting effects on growth. You will now see that the ambitious target you had assumed to reach within three years with the same portfolio was likely wrong.

Determine your growth gap by subtracting the effect from the target. This growth gap will help you make strategic bets on the right segments and assumptions.

The move from Mass Market to Segmented Market thus requires us to bear our operating customers based into separate markets with their specific dynamics, this will allow us to offset risk, and focus our strategy and position for growth.