What’s your best strategy for growing your business? That depends on what stage your business is in. There are 3 stages we will talk about… and each has a different focus.
If your business is in the start-up stage, then your best strategy is encapsulated in the “fastest path to cash” idea. You are looking for the “low-hanging fruit” — the easiest and cheapest method to bring in immediate revenue.
This is an excellent strategy for the start-up because it helps ensure that it will live long enough to grow into the next stage. (Most businesses fail because of cash-flow problems.)
Warning! I have seen businesses that are 20 years old and still using the start-up strategy. Even though they have money coming in the door, their line is a hodge-podge of products and services… whatever they found that would bring in more money quickly. It is highly self-limiting for the business and always feels like they are on the edge of disaster… and creates a tone of desperation inside the company.
Eventually, you will have picked all the low-hanging fruit and must either move on or starve. (Humans used to be nomad hunter-gatherers. Farming was invented to provide more stability with the food supply.)
This is where you begin to look for long-term growth. Opportunities that will not pay you tomorrow, but will pay you next month or next year… and the payback will be enormous. You can’t ignore cash flow in this stage, but you take a longer-term view.
This stage is analogous to farming. It is the equivalent of cultivating the ground, fertilizing it, planting seed, weeding and watering, and, finally, harvesting. The harvest of a properly tended farm will be many, many times what would be available to a hunter-gatherer.
Long-term Viability Stage
In this stage, you look for ways to make money day-in and day-out with small profit items and with large profit items. You examine additional markets you can expand into to broaden your product line (all within the same niche, however). You still don’t ignore cash flow (you never can), but your goal here is a mixture of products and services that will keep the company making profits no matter what the global, regional, or local economy does.
If we continue the farming metaphor, this would be like expanding a single crop farm into a diverse farm — one that raised and sold eggs, dairy, honey, corn, potatoes, etc. They sell a variety of products (still within a single niche — raw food) into multiple markets… and possibly to multiple buyer levels (end consumer, farmer’s market, distributor, etc.)
There is a mix of seasonal (harvest products) and evergreen (eggs, dairy, etc.) offered. The long-term business will have the same kind of short-term and long-term sales in their product mix. This is the hardest to achieve because it requires planning and foresight on the part of the business owner and leaders.
So which strategy is right for your business?
Which stage is your business in? That’s the strategy you need.
Your turn. Did I leave something out? Maybe you have a better metaphor. Go ahead and share with us (use the comments box). We’d love to hear your thougthts.
You probably already know which stage your business is in. More than likely, the issue for you is either how to maximize the strategy for the stage you are in… or how to get out of that stage and move into the next stage. You are in luck. Whichever it is for you, I can help. Contact me and let’s talk about it. We can probably find a way forward for you… in a way that is of real value to you.