5 min read
Time for change
The restrictions on our personal lives and businesses are gradually beginning to ease but the coronavirus will likely have long-lasting effects, with no quick return if ever to how things were. For a business to drive change against slow or negative growth, part of the solution is a new beginning.
In many areas, the pandemic has been a positive accelerator, it has challenged why office workers need to sit on trains for hours each day or why senior executives have driven across the country for a two-hour face to face meeting when so much can be done remotely, allowing people more time to be productive and more downtime to perhaps even grow their vegetables! We should also question the sustainability of global supply chains which may place more emphasis on UK manufacturing and re-purposing redundant retail shops as accommodation which in turn benefits the construction sector and creates more affordable housing.
Breaking through the glass ceiling
Of course, with any significant shift in markets, there are winners and losers and many balance sheets have been hit with more debt during the lockdown. However, times of change provide a time to reflect for the 5.9 million SME’s in the UK, a vast majority (76%) of which are ‘one-man-bands’. In total there are only 1.4 million employers in the UK and when you look at the emerging mid-market, government data shows that the number drops dramatically to 43,300 companies of 50+ people and we estimate less than 200,000 commercial companies that employ more than 20 people.
Why is this important? Well, if you are an ‘emerging mid-market’ business, you are the most likely to be an engine for the economy. It is statistically a lot easier to scale up a business with twenty people than it is with one, and only one in three start-ups make it beyond 36 months. In the current climate, you may not be feeling like an engine right now or feeling the ‘growth love’. Many companies do plateau. There are however breakthrough strategies and in times of dramatic change, we should consider what we can do differently. How do we break through the glass ceiling to super growth? As advisers to SMEs for nearly 30 years we see three fundaments to break through to super growth:
1. Get help and the right expertise
SMEs struggle to employ top talent and being utterly objective about you and your leadership team is critical. The glass ceiling is often in your own and your leadership’s mind and skillset. Starting a business or running it is very different to navigating fast track growth skills. How many entrepreneurs or business leaders are caught under the ‘Peter Principle’? In his book, published in 1968, Dr Laurence J. Peter observed that the tendency in most organisational hierarchies, such as that of a corporation, is for every employee to rise in the hierarchy through promotion until they reach a level of respective incompetence. Surely the same applies for entrepreneurs. We promote ourselves to our highest level of incompetence, then plateau.
2. Get capital
At present, there is approximately £2.3 trillion of private capital looking for a home and yield in Europe alone. It is better to own 50% of a business worth £20 million, then 100% of a business worth £4 million. Capital usually comes with added value fast track growth. Which acquisitions would you do, which new products and territories? It is also possible to de-risk, take money out of the company and employ a professional team to drive the growth so you don’t even have to do the work, albeit you will want to keep a close eye on the company.
3. Listen, listen, and really listen
our business may not be as productive as it could be, complaints or poor retention will show your weak spots. Your ‘challenging’ team may be right about some aspects and you may be wrong. Research counts as listening. What is happening in your sector, your future customer, and what is really happening with your competition? Listening can tell you where you can be truly different and exceptional and build your plan and vision around only 2 or 3 key focal areas. Most companies fight on too many fronts; by listening you can see which strategic initiatives are your real breakthrough points. Ditch the rest. It is better to do three things well than six things badly, listen and ‘Laser Focus’.
To super growth
With all the bad news and volatility in our current world, it is hard but as leaders, we know that a positive mindset combined with consistency creates new beginnings. Albert Einstein’s statement of “insanity is doing the same thing over and over again and expecting different results” is more relevant today than it has ever been. It is time for a change and a new beginning.
About Avondale Corporate
Avondale is a leading business advisor that helps ambitious owners buy or sell companies, secure investment, grow their business and enhance shareholder value. Audacious, authentic, and ambitious partners of exceptional quality, delivering your success. We have been advising dynamic entrepreneurs and companies for almost 30 years, both locally and globally.
For an exploratory discussion without obligation, please contact us on +44 (0)1737 240888 or email firstname.lastname@example.org.
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