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Tag: Business Growth

Fuelling Vibrancy in an Economy: Unleashing the Power of Competition, Innovation, Funding, and Talent

Fuelling Vibrancy in an Economy: Unleashing the Power of Competition, Innovation, Funding, and Talent

Written by Lindokuhle Ntombela on . Posted in Asset of Value, Funding, Innovation, Insights, Lead generation and conversion, Leadership, Mindset, Operational systems, Positioning, Scale & Grow.

Discover the key drivers behind a vibrant economy as discussed on a recent Money Show insert with Pavlo Phitidis and Bruce Whitfield. This highlighted the crucial factors of competition, innovation, funding, and talent and their role in shaping economic landscapes. Here we delve into the main takeaways from the show, exploring how individuals and businesses can contribute to building a thriving economy.

Competition Drives Progress: Competition is the driving force behind growth and progress in any economy. When businesses compete, they are motivated to constantly improve their products and services. This healthy competition fosters innovation and encourages companies to develop groundbreaking ideas and solutions that address market needs.

Innovation and Funding for Success: Innovation is the lifeblood of success in today’s fast-paced business world. It requires adequate funding to thrive. Access to capital is essential for businesses of all sizes as it enables them to invest in research and development, upgrade infrastructure, and expand their operations. Adequate funding also plays a vital role in attracting and retaining top talent.

Talent as the Engine of Success: Talent is a critical driver of success for any enterprise. Skilled individuals with expertise and creativity propel businesses forward. Whether large corporations or small startups, attracting and retaining top talent is crucial for driving innovation and achieving sustainable growth. Nurturing talent within an economy is vital for long-term prosperity.

Roles of Different-Sized Businesses:

Understanding the roles played by businesses of different sizes is key to fostering economic vibrancy.

  1. Large Corporations: Large corporations focus on distribution, leveraging their extensive networks to efficiently bring products and services to consumers. Their ability to reach a wide customer base and operate on a large scale drives economic growth and stability.
  2. Medium-Sized Businesses: Medium-sized businesses play a crucial role in new market development. Their agility and flexibility allow them to explore emerging markets, identify untapped opportunities, and pioneer innovative solutions. These businesses drive economic expansion by adapting to evolving market trends.
  3. Small Businesses: Small businesses contribute to the economy through innovation at the edges. They bring fresh ideas, niche products, and specialized services to the market. Their ability to swiftly adapt and experiment fosters diversity and resilience within the business ecosystem. Small businesses often serve as incubators for innovative concepts that can eventually scale up and benefit the broader economy. Building an Economy: Key Insights: The radio show provided valuable insights on building a robust economy. Here are some key takeaways:
  • Take initiative and don’t wait for external forces to improve your circumstances. Start pursuing your entrepreneurial ambitions now
  • Medium-sized businesses are the bridge from the large to small enterprises. They can maintain their agility by embracing smart strategies and leveraging contracting and consulting opportunities.
  • Set a single destination and adopt a focused approach to navigate challenges and seize opportunities. Learn from past experiences, take ownership of decisions, and leverage acquired knowledge.
  • Uphold ethical practices, avoid theft, late payments, and animosity towards competitors. Foster collaboration and continuous learning as part of a healthy business environment.

To listen to the full discussion from the show:

This Week@Work:Marketing is not a HOW challenge, it’s a WHY, WHO, WHAT challenge

This Week@Work: Marketing is not a HOW challenge, it’s a WHY, WHO, WHAT challenge

Written by Lindokuhle Ntombela on . Posted in Leadership, Mindset, Positioning, Scale & Grow, Week at Work.

If you’re struggling to reach your customers, to tell them about your product or service, you’re probably focussing on the wrong issue.

First, you need to understand precisely what problem you solve… for who… and how you do that, consistently… which will enable you to figure out how best to reach them so that your message lands.

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This Week@Work: Growth is not growth is not growth

This Week@Work: Growth is not growth is not growth

Written by Lindokuhle Ntombela on . Posted in Creating time, Grow & Exit, Mindset, Scale & Grow, Week at Work.

This Week@Work a discussion around acquisitions as a strategy to accelerate growth gave Pavlo an opportunity to explore this idea in more detail.  Several types of growth make up your business growth recipe if you intend to grow revenue, profit as well as capital value that can be realised.

Accelerated growth is one of these, and has a number of elements to it but an acquisition of a business may not be the path to achieving it.

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How you position your business determines your ability to grow.

How you position your business determines your ability to grow.

Written by Lindokuhle Ntombela on . Posted in Asset of Value, Creating time, Insights, Operational systems, Scale & Grow.

Pavlo recently had a valuable conversation that highlighted the common challenges faced by many business owners. One crucial aspect that determines the effectiveness of your business in terms of competition, scalability, growth, and industry dominance is how you position it.

Here’s the context: the business in question deals with second-generation door and window frames, and it has been operating for three generations. The owners have been blindly loyal to their suppliers, but they are experiencing a decrease in customer loyalty. Additionally, they are grappling with an aging workforce and the absence of apprenticeships and artisanal skill development.

The business has hit a growth ceiling, and what makes matters more pressing is the fact that the average age of competitors across the industry is approaching 61. This poses a challenge as the business needs to grow to combat inflation and secure retirement and pensions for the third generation, who are constantly uncertain about the future.

The owners are aware of what needs to be done to foster growth, but they find themselves lacking the time to dedicate to it. Their daily, weekly, and monthly operations are the center of their attention.

To overcome these challenges, the resolution lies in repositioning the business. The following steps should be taken:

  1. Position: Clearly define the business and its core focus. Determine precisely who you serve, and what experience you provide in delivering your solution to them.
  2. Build a system of delivery that codifies every action and step that enables that delivery, consistently.
  3. Do it with your team: Acknowledging that growth cannot be achieved alone, they engaged their team in the decision-making process. By leveraging collective knowledge and expertise, they instilled a sense of ownership and commitment, inspiring everyone to work towards a shared goal.
  4. Release your time: Recognizing the value of the business owner’s time, they delegated and automated tasks that could be handled by others. This freed up time for the owner to focus on growth strategies, explore new opportunities, and build connections with industry leaders.

As the business owner, you need to ask yourself, “What is your job”? In our door and window frame company example, the business owners shifted from being immersed in daily operations to becoming leaders. Guiding and inspiring the team towards achieving growth objectives became their primary focus. To get this right, take a leaf out of their playbook:

  1. Start: What business are you in? Revisiting their core purpose, they identified the specific niche within the door and window frame industry where they aimed to excel. This allowed them to differentiate themselves and concentrate efforts on areas with the greatest growth potential.
  2. Build – create a chassis to support growth: By decoding what they did and how, they established a solid foundation to develop apprenticeships and skill development initiatives to attract and nurture new talent, ensuring a sustainable workforce for the future.
  3. Grow and lead it: The business owner took the lead as the driving force behind the company’s growth. Actively seeking expansion opportunities, exploring strategic partnerships, and embracing innovation became their mantra to stay ahead of the competition.
  4. Sell and package it: Understanding the value of their business, and with a system and team in place that showed potential buyers the sustainability and growth trajectory, the owners have built the business into an asset that functions without them in it, and thus can be succeeded or sold.

Positioning your business effectively is crucial for competition, growth, and industry dominance. The experiences and challenges faced by this door and window frame company underscore the significance of strategic decision-making, fostering a growth-oriented culture, and adapting to changing market dynamics.

To listen to the full discussion from the show:

Elite Business : If your business is not growing, it’s dying!

Elite Business: If your business is not growing, it’s dying!

Written by Lindokuhle Ntombela on . Posted in Insights, Leadership, Operational systems, Positioning, Scale & Grow, Team.

In this article, first published in Elite Business, Pavlo Explores: Crafting a Strategic Growth Plan for Success in Today’s Economy.

Is your growth plan actually no plan at all? Or is it to sustain your value – neither is enough in this economy.

The Ukraine invasion, global supply chains, chip wars, trade ‘wars’, COVID hangovers, access to skills and grumpiness have heavily impacted our economy. Add inflation to a grumpy mood, and you, not the state of the economy, will kill your business if you allow it.

Let’s prevent that!

Plan to plan, but no plan yet.

If you are stuck here, you will develop an irreversible aversion to risk and a mindset that only sees risk and reasons not to act. A year back, I met the owner of a second-generation family business in the construction sector. He enjoyed a reliable £13m annual revenue, up and down a few percent for the decade preceding covid. Since then he has wanted to regain his revenues and dividend flows. Still, it remains talk, unable to commit to building a growth plan. Perhaps a decade of comfort atrophied the muscles needed to act amid his competitors enjoying record growth over the last 3 years. 

Should this be you, sell your business before its value erodes further or act now. Here are two options.

Act to sustain your value.

In February, I met the owners of a once beautiful £21m revenue business. In response to the strain of their overheads bearing down on them, both partners dove back into operational sales. Spinning rolodexes, bouncing between their digital platforms, CRM and debtors book helped find, win and hold customers. It’s an exhausting and chaotic strategy, and they are reclaiming their £21m. 

It’s not sustainable, and it’s not enough. 

To maintain their 2019 value, they need growth to meet the corrosive elements of business value. They include:

Inflation – at 10,1% in March, robust inflation is likely to overstay its unwelcome visit. As business owners, we should look to open our upside and protect the downside so let’s expect the promised 2% target to arrive only three years from now. 

Currency – our currency’s value is driven by relative inflation and belief. Technically, the gap between our inflation rate and that of our peers drives the relative depreciation of our currency. This gap runs around 4% at the moment. It is then either depreciated or compounded by the belief and trust in Britain’s ability to grow and attract investment. 

Industry Growth Rate – Industry growth rates are, at best relative and as speculative as any revenue forecast a business owner presents to investors. Many factors weigh in on this number. For the benefit of a simple calculation, let’s assume that your industry is expected to grow at 2%.

Adding up the numbers, to maintain the value of their company, they need to grow their £21m by 16,1%.

After running these numbers, the mad flurry of activity undertaken by the founders paused. They boldly and purposefully replaced it with the following plan.

Plan to scale, grow and dominate segments in your industry

While 16.1% feels like a considerable number, scaling, growing, and dominating a few segments in your industry needs more. At least add another 3-5% to boldly set your year-on-year growth at a minimum of 20-23%.

A tough economy rewards companies that respond on the front foot ahead of the changed lived reality that their customers and clients face. 

Start by revisiting which customer segments you wish to dominate and reset your product-market fit to meet the new experiences demanded by these customers. Next, articulate these experiences into your commercial activities, processes and systems. Done with your team, not alone, helps create accountability and enables effective delegation. 

The result will be a simple, relevant, crisp strategy defined against a well-defined market segment. It will be a commercial system honed to service that market, empowered and led by a purposeful team. It will generate organic growth and resuscitate the value and dividend stream you once enjoyed. Valuably, it will release your time to lead the 20-30% that this economy offers.

Yup, I know, I said 20%. However, done this way, 30% year-on-year growth is likely, so why not!

business leader

Business Leader: Inspiration from an onion – Reset and rebuild your business model to reignite growth

Written by pippa@aurik.com on . Posted in Insights, Leadership, Scale & Grow.

In this article, first published in Business Leader, Pavlo shares a simple tool – the onion – to think about your business, and identify your strategic focus.

Our inflationary, high-interest rate and low-growth economy will see companies with high overheads struggle to maintain the performance demanded by shareholders and executive bonus calculations.

As inflation and interest rates shrink local market value, access to established and new markets offer growth alternatives. Additionally, resetting and rebuilding a business model to increase productivity and performance will become a strategic imperative.

Market access

Expect mounting challenges accessing foreign markets. Brexit increased expenses and obstacles to trade with our closest £300 billion market. The array of ratified trade agreements might offer alternatives, such as the recently trumpeted CPTPP trade agreement which is worth a theoretical £37bn. Our challenges will be many. Our strengthening currency, significant differences in labour costs, and rapidly closing gaps in digitisation and technology competitiveness all weigh in. For products, add the cost of inputs and transport, set to increase further as we comply with our laudable commitments to Net Zero and other climate-friendly policies and regulations. All add to the cost of doing business, making our products less affordable than alternatives. For instance, imagine the cost of competing with a chocolate manufacturer in Chile or Malaysia, where our labour and transport costs are higher, before factoring in compliance with legislation and policy.

To overcome these challenges, we must increase productivity significantly. And since 2008, we have struggled to get this right! It can and will be done by those leaders intent on preserving their company value and remaining steadfast in growth despite all our economic ailments.

One way to get this right is to take a lesson from the simplest of vegetables: the onion.

Reset and rebuild your business model to reignite growth

An onion has three layers – the sweet inner; tangy middle; and outer protective skin. Applying this metaphor to your company offers up many opportunities.

Your inner layer is about understanding what is core and strategic to your survival, growth, and domination. You must own, deepen and protect these elements. Your middle layer includes everything non-core but strategic to the business. Outsource these elements to reliable partners on medium-term contracts. Your outer layer comprises everything non-core and non-strategic, where products or services are commoditised, and price wins the deal.

We recently used the onion to reset and rebuild a business intelligence company we work with. At its inner core, it must excel in analytics, interpretation, design, and presentation. It must own its software and skills in analysis and presentation. Its middle layer requires hardware, connectivity, and brand and marketing service providers. They are strategic but non-core to success. We established medium-term partnerships with providers whose services are their core strategic foci and intent. Their outer layer includes stationery, accommodation, refreshments, and other non-core, non-strategic products and services.

Today, they enjoy several benefits. A honed, simplified understanding of what matters most to grow and dominate their industry increased their productivity and market responsiveness. It has also allowed leadership to spend almost 70% of their time leading growth instead of managing operations. The company’s newfound growth has come increasingly from big and corporate clients. Out of necessity, these corporates have had to equally tighten their foci and shed costs by outsourcing previously insourced services such as business intelligence.

As business leaders, our company growth will increasingly come from excelling at how we position, win and lock in our services as middle-layer onion specialists.

2 halves of a business

Elite Business: Two halves make the whole business

Written by pippa@aurik.com on . Posted in Insights, Leadership, Operational systems, Positioning, Scale & Grow, Team.

In this article, first published in Elite Business, Pavlo explores why a brilliant product or service is not enough to build a brilliant business.

What you do is not enough; how you do it matters more. You have talent, are skilled in your vocation and have built competitive products, but customer acquisition is a grind and even stalling – Why?

Recently, a vociferous and highly talented founding team convinced me (and themselves) that they had built a globally competitive product. Yet, sales were stalling, and the grind needed to land a new client was bleeding their and their team’s passion dry. As exhausted as they were, so was I until the penny dropped: A great product does not build a great business.

Sometime during the late 19th century, a moment of inspiration came to Ralph Waldo Emerson, the American founding father, essayist, and poet. After witnessing a mouse escape a botched mousetrap, he wrote,”Build a better mousetrap, and the world will beat a path to your door”. In the late 19th century, he was probably right. There were relatively few products, and of those in the market, quality varied magnificently.

Emerson’s ghost visited me recently. It was the central thought in my brain as I listened to one of the founders give his take on why their product was exceptional, innovative, and globally competitive. Another founder shared her take on the market problem as one of education. “How do you convince customers of the value of our product when they don’t even know about us or understand how brilliant our product is?” she bemoaned.

It’s a common problem that many company owners contend with. Understanding why and how this problem occurs is essential to scale, grow and dominate niches within your industry. It’s vital to distinguish your brand and build your business into an asset that you can monetise through a premium exit in the future. And a great, world-class product is not enough to get this job done.

Every business has two fundamental parts to it. Both must be optimised, linked and integrated to create the complete experience any winning business offers. One without the other will fail your efforts repeatedly and eventually drain the passion and optimism that feed the drive and commitment that growth demands.

The first part is your product or service suite. And Emerson’s quip remains constant here. Every industry is overcrowded, and out of necessity, most of your competitors have built solid products and services. Trying to attain a product advantage by creating more features for your product or service won’t last or get you into a market on a sustainable basis. The primary job of your product is to solve a problem. A drill that cannot drill a hole will not build a world-class business! 

Solving a problem needs tighter definitions in competitive markets. It requires a solid understanding of whose problem you are solving. For example, a drill used by an urban, single professional for hanging the odd picture needs a different proposition to a drill that aims to solve the problem encountered by a professional handyman.

This brings us to the business’s second half, which is essential to scale, grow and dominate. The product or service that solves a well-defined problem for a well-defined market segment must couple with a commercial system led by a motivated team to create relevant, well-defined customer experiences.

The question is, what creates a great experience? This, too, will differ depending on who you serve. Back to the drill. How a young, urban professional wants to learn about a drill, understand its capability, match that to the problem they want the drill to solve differs dramatically from the professional handyman. Additionally, how the engagement, buying, fulfilment and administration process works to deliver the product would differ between the two customers to create a complete and ideal experience.

Curating this experience requires a deep understanding of which customer segment you want to own. Then, narrow it further to understand precisely what experience they want to select your service above the many contenders. This creates the blueprint for your second half. It guides how you design, optimise and integrate your commercial functions into a repeatable, predictable experience. It is the key to accelerating your products and services to that market. This half of the whole business is arguably the hardest to build and the essence of a scalable service platform. Without it, scaling, growing and dominating a segment or three in any industry is a dream.

I recently reached out to Emerson’s spirit to update his coined phrase. “When everyone has a good mousetrap, you’d better beat the path to your customer’s door”. I’ll let you know his decision as soon as he responds. Meanwhile, the founders and their 48-strong team took it to heart. While it has taken some time, they are on a 17.6% annual revenue growth run rate, which seems unlikely to slow anytime soon!