What growth expectations do you have for your company? Are you waiting for sales to pick up before you hire more people? Are you the bottleneck instead of the growth-leader for your small business? Your thoughts and feelings around growth are more important than you know. Today, I’ll show you how you can choose the thoughts around growth that will best serve you and your business.
There are eight critical mechanical components of business. There are seven levels of core energy. I’m creating a series of posts called Business Mechanics & Mindset. You can read about these topics in more detail in my book entitled, “Business Mechanics & Mindset: How Your Thoughts Create or Sabotage Your Business Success”. Today’s post is the sixth of this series entitled Core Energy™ Growth.
Before I go too far, I’ve created another post that you may want to read before you read this one. It is entitled “What is Core Energy?”. It explains the seven levels of Core Energy™ in detail that will be mentioned in this entire series.
If you want to watch a video of this exact same topic, go here: https://youtu.be/9iKMpcupQ4w
(Core Energy™ is a registered trademark of iPEC and all Core Energy™ concepts described in this blog post are derived from iPEC’s Core Energy Coaching™ program.)
The word “growth” brings up conflicting thoughts among small business owners. Some think that if they grow, they’ll simply inherit more work for themselves. Others want to grow but are waiting for sales to justify hiring more people. Still others, underestimate the cash-suck that growth will cause once they make the decision to grow. And, some believe they are just fine where they are, so why grow?
In my business coaching practice, I’ve discovered that there are four key considerations around business growth:
Growth Mindset: How are your thoughts hindering or helping the growth of your business?
Strategy: What particular mechanism should you use to grow your business (e.g. franchise, organic growth, outsourcing, acquisition, etc.)?
Scalability: How can you grow and deliver improved value and quality to your customers, while improving profitability of your business?
Facility: What infrastructure will you need in the way of office space or technology to support your growth?
I want to illustrate all four of these growth ideas through a simple story.
Jane owns a local flower shop called Flowers Are Us. She started her shop because she loved gardening and especially loved flowers. Jane is stressed out and is often overwhelmed when it comes to special occasions like wedding season, and Valentine’s Day. People rave about Flowers Are Us in the local community and brag how their prices beat the national chains.
I will illustrate Jane’s thoughts and feelings as she climbs the ladder from Level 1 to Level 5 as she considers various growth scenarios.
The Victim – Level 1 – I Lose
Mindset: Jane believes that she has been lucky to get customers in her past, but she is convinced that flowers really aren’t that important. As soon as the economy experiences a downturn, her flower business will crash. As it is, she isn’t making a lot of money anyway, and her customers already complain about her high prices.
Strategy: The best growth strategy is to fill flower orders for now and hopefully earn enough money to retire.
Scalability: If Jane were to grow, she is concerned that she’d need to charge more for her flowers. With people complaining about high prices, there’s no way she could get any bigger.
Facility: There’s no way she will get a loan to build a shop that will leave her in even greater debt when the economy crashes.
Victims will run away from any growth strategy. They see their industry as shrinking Their most proactive thought about growth is that there’s only one choice of growth. And that choice can’t work.
The Fighter – Level 2 – I Win, You Lose
Mindset: Jane is dominating her local town’s flower business. She is doing great as her prices are better than the large chains.
Strategy: She wants to grow by opening another flower shop location in an adjacent town.
Scalability: To keep Flowers Are Us competitive, she will need to find a location at a bargain price and find a competent shop manager who will work for a low wage.
Facility: Jane has created a killer business plan that has received multiple bank offers to loan her money to open up her new location.
Fighters are competitors. They are highly valuable in a competitive market. They will shop around for the best prices to scale. Unfortunately, they don’t trust or empower others which means that any growth is 100% on them. This tactic will work for growth in the short term but is highly limiting for growth beyond a few locations.
The Survivor – Level 3 – I Win
Mindset: Jane sees growth as a response to the demand for her flowers. She’s overwhelmed on special days.
Strategy: Jane is making plans to expand her current flower-shop when demand picks up on regular days.
Scalability: Jane has estimated that she can afford to expand as soon as her average capacity exceeds 80%.
Facility: Jane is considering a loan for her expansion, but knows that she can fund her expansion with the cash she has in the bank, so why borrow money?
Survivors tend to be passive about growth. They will react to increases in customer orders by growing themselves to meet the demand. If they don’t see additional demand, they will be perfectly content to stay where they are. They will shy away from any risky associated with growing their business. All growth risks are calculated risks with little downside, if they fail.
The Lover – Level 4 – You Win
Mindset: Jane is grateful for her staff and depends on her staff to grow her flower shop. She is constantly grooming her existing staff to take on more and more responsibility.
Strategy: Jane has identified two of her key employees, Jim and Natalie, who she believes have the ability to take on the responsibility to run their own shop. Both Jim and Natalie will get a 50% equity share in the new stores without spending a penny.
Scalability: Jane is planning to keep her prices consistent as she grows. In fact, she plans to offer discount incentives in her new stores to quickly build a customer base.
Facility: Jane is working with Jim and Natalie to identify facilities in adjacent cities to expand Flowers Are Us. She has tasked both Jim and Natalie with creating business plans that include making lease payments for their new shops.
Lovers will rely on their people to grow. They invest in their people giving training and encouragement. Unlike, fighters, lovers will empower and trust their people. Even when their people fail, they will encourage them and give them second and third chances. Lovers will rarely look outside of their current employees for leadership. As a result, lovers will not grow unless their people are ready for growth.
The Opportunist – Level 5 – Win/Win
Mindset: Jane is excited about the success she’s achieved in her town. She sees the opportunity to grow Flowers Are Us to a national brand. She is considering many different growth strategies.
Strategy: Jane is thinking of franchising but feels like this may be another 1-800-FLOWERS copycat. That’s no good. She has considered opening more shops in other cities, but that seems “small time”. The idea that has Jane most excited is building a greenhouse operation in cold-weather climates. Then selling flowers wholesale to local flower shops. Since most flowers must be shipped from California at a high cost, local greenhouses will ultimately be a better option for local florists.
Facility: Jane has created a plan to build and staff green houses throughout the northern U.S. She is excited to learn that land prices in many of these areas are quite reasonable with short shipping distances to populated cities.
Scalability: Jane has estimated that local florists will pay 15% less for locally grown greenhouse flowers than they do to ship flowers from warm-climate states. She is in the process of getting contracts with florists to agree to buy a minimum amount of flowers from her greenhouse facilities.
Opportunists think outside the box. They see opportunity where others see nothing. They tend to shy away from the traditional growth strategies for a few reasons: 1) they don’t want to compete as another commodity in as saturated marketplace; and 2) it’s much more fun to blaze a trail no one’s traveled on before. Since opportunists are win/win thinkers, they won’t grow for the sake of growing. They also want win/win results in their growth opportunities. In this story, you can clearly see the win/win thinking playing out in lower costs of flowers to local flower shops, and increased wealth for Jane with profitable greenhouses.
I’ve just described five Core Energy™ levels of growth represented by Jane as she plans to grow Flowers Are Us. There is no WRONG approach to growth. However, your mindset will often create your reality when it comes to growth in your small business. Most business owners who are reluctant to grow and adopt victim or acceptance thinking tend to attract customers and employees who are of a similar mindset.
Think about it… If you’re a dispassionate employee of a stagnant company, you will be fine with no change or growth. If you are an ambitious employee with the hope of becoming something more, you will quickly leave a stagnant company.
I hope you learned a few things about how you can pick a growth mindset that fits your business. If you’d like to learn more about how I coach my business owner clients with Core Energy Coaching™, please visit my website at www.mmbizcoach.com.