As a business leader, when you strive to grow a business, contemplating the number of barriers can make growth feel unattainable. Scaling up requires us to consider all issues. Do we have enough employees? Can we keep up the needed service level? Do we have the proper supplies? Do we have enough space and storage? How will IT handle the volume? Can HR keep us on track for people? What is our capital position? Can we float the accounts receivable? This list of questions barely begins to describe the problems facing your growth. All of these problems are real and need to be solved. However, none of these are real limits.
Real limits in any system are direct derivatives of the primary constraint. Think about what the system-wide limit is and how it affects other problems. An easier way to find your system limit is to ask a simple question. Does solving this problem improve growth? Or does solving this problem only create other problems? In other words, what is a cause and what is an effect?
Think about this example. If I want to grow, I am going to need more space and more employees to fulfill the orders. This might be true. However, if we give you a magic wand and this problem is solved, does your business grow? Most likely, the answer is no. If the answer is yes, how many sales are you currently turning down? If you are not turning down sales, more space and fulfillment employees will not create growth. The real problem is how to get more sales. It’s difficult to face a sales-related problem because solving the space and employee problems is a lot easier (and fun). You get to employ people and build/buy a new building.
As you apply cause and effect thinking to your business, some interesting conclusions begin to appear.
- First, most problems are real, but not a limit on growth.
- Second, you spend most of your time and money on problems that don’t grow your business.
- Most of your managers spend time asking you for improvements that don’t drive growth
- Lastly, there is only one true limit on growth.
Growth in every business is a derivative of improved sales. Sales in every business is improved by communicating your value to the market. There is only one way to communicate your value: marketing. But how do I improve my marketing? Lean into doing what has already worked for you up until this point. You don’t need to reinvent the wheel. You simply need a larger budget. Every time you limit your marketing you are limiting your growth.
What is a marketing budget? It might be a cap on revenue.
Instead of limiting your spending, push your team to find more ways to spend money the right ways. Too many people hold back on marketing when they need to do the opposite: scale their marketing to have an impact. Every day we see customers that know a certain direct mail program will generate sales. However, instead of scaling that program, they shrink the list or limit the region just to hit a budget. Stop making the same mistake and limiting your growth.