Uncovering the blind spot in your business
Running a successful small business is difficult. In fact, so difficult that according to the Australian Bureau of Statistics, more than 50% of small businesses will be out of business within their first five years.
In this article you will discover the difference between Foundational Business Practices and Key Growth Strategies and why understanding the difference and knowing why you need both, may be a critical light globe moment in creating a profitable business, that will survive and thrive to create the future you planned for when you started it.
Running a business requires you as the business owner to know a lot about a lot! Do you know that pressure I’m talking about… you have to know everything about everything!!
I don’t know about you, but for me to process information and feel like “I know”, I need a system or a framework for it to sit in, and I like to see how the new information I’m learning relates to what I already know!
It’s really about systemising and structuring my knowledge to make business, well I want to say simple, but that’s not the right word. Easier to digest, maybe. The easier it is to digest the information, the easier it is to apply.
And…. well…… application is the key to business success.
Recently, Brenda and I had a light bulb moment and we’re so excited to share, because we believe we have uncovered a major blind spot that many business owners may have, that will absolutely make a huge difference when it comes to working on and growing your business!
It’s the difference between Key Growth Strategies and Foundational Business Practices!
Key Growth Strategies (KGS) are the new and exciting strategies and tactics that we employ and get excited about to take our business to the next stage, or solve a major problem. They are essentially the next new shiny object. These are the activities in business where you could work all night because you’re so excited about the opportunities they are going to create.
There are endless ideas when it comes to these strategies and they always need to be specifically developed for your business.
For example, a new target market, new expansion, new country of trade, new products or services, new marketing activities or new technology. All with the hope that this is going to answer all your prayers to the ‘business success gods’.
The effectiveness of these KGS’s and their results is, however, subject to one important element; Strong Foundations. How well a business has addressed and implemented its Foundational Business Practices.
Foundational Business Practices (FBP’s) are not shiny and exciting. In fact, we have often heard them described by business owners as boring. Needless to say, this is most likely why they are always put in the ‘too hard’ basket, or the ‘I don’t have enough time’ category.
However, what we have uncovered, is the degree to which a business has developed their FBP’s alongside the KGS’s, is the degree to how profitable and successful they are. We found, after surveying over 100 business’ that the number of items a business owner could say yes against on the FBP check list of 272 items, the more likely they were to be highly profitable.
The BIPlan Profit Factor Zones
Of the 100 businesses we surveyed:
- ALL businesses scoring less than 30% were losing money
- ALL businesses scoring more than 50% were at least breaking even
- ALL businesses scoring more than 80% were profitable
Through talking with many business owners and run many different types of business’ in the past ourselves, we conclude that the more your FBP’s are in place, the more likely the KGS’s are going to work and return a significant amount on investment.
So if you’ve been frustrated in the past by business growth strategy after strategy not hitting the mark and having no idea why, this may just be your answer! It certainly was a lightbulb for us!
If you’d like to discover more about the FBP’s Checklists, you can assess your business against it for free. Click on the Start the Self Assessment Button below to get started