Some entrepreneurs tell me that they have no interest in expanding their business operations. “I am happy just running a small business so why should I expand?” or they say, ” I just want to maintain my sales and profits.”
I have found that it is absolutely crucial to keep expanding your operations, sales and profits. The moment your business stops growing, it starts dying! The moment you stop expanding, your business starts shrinking. Sorry to be so dramatic, but it is true.
Nothing remains constant in your business environment. New competitors enter all the time. Existing competitors keep getting stronger by the day. They keep improving their products/services and expanding their own market share. Consumers’ needs keep changing and expectations keep rising.
So, if you keep running your business the same way, you are not really maintaining the status quo, you are slowly but surely getting left behind, as everything around you is changing and moving forward.
I have seen so many cases of entrepreneurs who used to do well at the beginning. Soon, the markets they were serving began to change or disappear and their once lucrative business quickly disappeared.
Here’s a good example. During the late 1990s owners of CD shops began to see their customers disappear as people starting buying and downloading music online. Then many retailers went bust as consumers of luxury goods lost their spending power during the last recession.
The cause of all these business failures was not the external factors alone. It was primarily because these business owners did not expand fast enough to diversify their operations among different markets so that a boom in India can make up for a downturn in Singapore. They did not expand into new product offerings so that when one revenue streams dries up, they have ten more to make up for it.
Another reason why you have to keep focusing on growth is to retain and continually attract the very best talents in the industry. Remember that every employee that joins you has the dream of earning a higher salary every year. All of them aspire to be promoted and to become the manager/director of a division in the foreseeable future.
Unless you make higher profits every year, you cannot fulfill your employees’ aspirations of higher incomes. Unless you grow your business operations, your staff will never be able to move up and take on larger roles. This is why a business that experiences stagnant growth will soon begin to lose their best employees and managers. This will lead to the eventual downfall of the company.
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