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5 Myths About Strategic Thinking Slowing Your Business Growth

Posted by
Jackie Nagel, Synnovatia
strategic thinking

Strategic thinking, the thinking process used by the most intentional and successful of Stage II enterprise entrepreneurs is getting a bad rap!  And,  who’s paying the price for it?

You are! The small business owner!

Apparently someone (insert air quotes here) is attempting to sell snake oil on how to think about thinking strategically. After a while, it gums up our business growth. 

 

strategic thinking

 

Myth #1: Strategic Thinking is Only for Big Business

Actually, strategic thinking is for any business looking to take a long-range view of their business and the environment in which it operates. It’s what’s required to make the most of any changes on the horizon.

Applied successfully, strategic thinking helps you better leverage your precious resources of time, talent, and money. With better use of resources comes accelerated forward movement.

Myth #2: Only Certain People are Qualified for Strategic Thinking

The numbers are in — and they aren’t pretty! Chief Executive Magazine reported that only 3 out of every 10 business leaders know how to think strategically.

Don’t let this statistic reinforce the myth. Actually, it points out that few people have been taught this critical business skill. If you’re willing to learn,  you can become a strategic thinker for your business.

Myth #3: I Don’t Have Time to Think Strategically

This is quite prevalent, especially for small businesses. I understand first-hand how difficult it is to pull our heads out of the day-to-day operations, especially once the flurry of our inbox is unleashed.

My dad taught me that if you don’t take the time to do something right the first time, how much time do you have to do it over. That’s a valuable lesson to learn.

High-level thinking encourages the proactive monitoring of your business so you’re not caught off guard by some unnoticed event or trend. Strategic thinking saves you time and money. In the end, it’s what takes the business to the next level. 

Myth #4: Strategic Thinking is a Waste of Time

This myth is particularly poignant for many business owners who escaped the bureaucracy of a corporation in search of their own business.

Having spent hour, upon grueling hour, tied up with multiple people who talked ad infinitum only to use the strategic plan as a doorstop, it’s natural to think it’s a waste of time.

Truthfully, strategic thinking is fast, easy, and very effective when done consistently and correctly. (Be sure to ask us how!)

Myth #5: I Think Strategically All Day

Is it strategic in nature? Does it take your goals into consideration? Is it based on data? Are actionable, corrective actions included in your thinking?

You may be thinking all day but you’re not thinking strategically. In fact, most entrepreneurs spend their day thinking tactically. In reality, you’re thinking about how everything will get done.

Strategic thinking, at the start of your week and/or day, means less thinking (i.e., worrying) about how to get it all done. Strategic thinking clears out the clutter lurking in your mind. It keeps you focused and on track with the activities most meaningful to achieving your dreams.

Do any of these myths sound familiar? If so, rethink your approach to the kind of thinking that ultimately impacts your business.

Strategic thinking is the quickest, most predictable, time-effective skill to achieving business success.

 

The Blueprint for Strategic Business Growth for The Messy Middle

Posted by
Jackie Nagel, Synnovatia
business growth

When asked about business growth goals, many entrepreneurs caught in the messy middle respond with vague statements like “do better than last year” or “double what we did last year.”

These off-the-cuff answers don’t stem from a lack of ambition; They expose a lack of strategic thinking necessary for establishing clear goals, which are essential for guiding decision-making and ensuring long-term success.

For most small business owners, achieving growth often feels like a mystery surrounded by uncertainty and challenges. This ambiguity happens when we’re caught up in day-to-day operations, constantly addressing urgent issues instead of focusing on long-term strategies that drive growth and sustainability.

business growth

Business Growth: Not as Easy as it Seems

During the economic downturn of 2008, entrepreneurs faced the harsh realities of an economic retreat. Revenues dipped, budgets were slashed, and talent was reduced just to stay afloat.

My father, a product of The Great Depression, would always say, “We need to tighten our belts.” And tighten our belts, we did. Despite these efforts, many businesses couldn’t survive. The failure rate for small businesses hit 4%, and an additional 12% shuttered in 2009.

Still, some companies managed to sustain a 20% growth rate and weather the storm.

Fast forward to 2020, and we faced another economic upheaval due to COVID-19. By April 2020, 22% of small businesses had vanished despite PPP support—that’s 3.3 million businesses gone. One year later, nearly 37% of small business owners anticipated that returning to normal operations would take longer than six months, with talent acquisition being their primary concern.

Despite the uncertainty of the past 15+ years, optimism remains high among small business entrepreneurs. That’s encouraging news!

Business Growth: How Fast is Too Fast?

While pursuing my MDE (Management Development of Entrepreneurship) at UCLA Anderson School of Business, I had the privilege of studying under Professors Yvonne Randle and Eric Flamholtz. They created a framework to prepare entrepreneurs for business growth.

Based on their extensive work, they identified five rates of growth for small business firms (from “Growing Pains…Transitioning from an Entrepreneurship to a Professionally Managed Firm” by Eric Flamholtz & Yvonne Randle):

1. Less than 15% annually — Sustainable Growth

While this rate might seem modest, it allows a business to double in size over five years. Not too bad! For many small business entrepreneurs, doubling in five years would be a welcome change from “a different year, the same revenue” situation.

2. 15 – 25% annually — Rapid Growth

Rapid growth is exhilarating but it can also be exhausting. Business owners at this rate of growth often find themselves stretched thin, juggling time, talent, and finances. This accelerated growth often requires an infusion of capital. Although the idea of a capital infusion can be daunting it’s often necessary for breaking through to the next level. Being strategic helps you manage the risks — and reduces your stress.

3. 25 – 50% annually — Very Rapid Growth

With very rapid growth, we see a significant increase in performance or market expansion each year. This often indicates a company or sector that is scaling quickly and capturing market share quickly. This rapid expansion highlights the company’s ability to adapt to changing market conditions and it also underscores the potential for long-term sustainability.

4. 50 – 100% annually — Hypergrowth

Companies experiencing hypergrowth are scaling at an exceptional pace, often outpacing competitors by rapidly expanding their operations and customer base. These companies typically leverage innovative strategies, advanced technologies, and agile practices to sustain their accelerated growth.

5. Greater than 100% annually — Light-Speed Growth

This level of growth signifies that a company is more than doubling its size every year. Such accelerated expansion often indicates a strong market demand, innovative strategies, and dynamic leadership driving the business forward.

Your Goal for Business Growth

Rapid growth is enticing. It offers the promise of increased revenue and market presence, and it can also bring significant challenges.

A business that expands too quickly may outpace its existing infrastructure, leading to operational inefficiencies and logistical bottlenecks. This results in your business struggling to manage its newfound success, potentially choking on the very growth that seemed so promising.

Final thought…

Being strategic aids in managing risks. By strategically planning for the year ahead, you can navigate the year more effectively and focus more precisely on your goals. You’ll maintain a sense of control, ultimately leading to a more balanced and less stressful growth experience.

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At Synnovatia, we specialize in helping small business owners caught in The Messy Middle unlock their growth potential. If you’re ready to pave your path to strategic business growth, reach out to us, and let’s make your growth goals a reality.

The Entrepreneurs Strategy to Overcome Stalled Growth

Posted by
Jackie Nagel, Synnovatia
Entrepreneurs strategy for slow growth

You’re an entrepreneur. You made it through the core startup phase of your business growth. You’ve refined your buyer and honed your offerings. Your marketing funnel is consistently generating client leads. And, you’ve built a strong reputation in your industry. Well done! 

The good news? You no longer worry about survival. 

And yet…

You’re overwhelmed. Burned out. Exhausted. 

You work long, endless hours. Each day is utter chaos only to wake and do it again the next day. 

With no end in sight, you wonder how much longer you can work at this fevered pace. 

The worst part? Despite your continued effort of hard work and long hours, your business growth has slowed or stalled. Egads! 

Entrepreneur strategy for slow growth
Photo by Luke Chesser on Unsplash

You’ve hit a plateau — a ceiling — that seems impenetrable regardless of the successful implementation of effective strategies. 

What started out as an exciting journey for you as an entrepreneur has turned into a bit of a nightmare. You feel trapped. You’re falling out of love with your business but can’t quit!

You’ve invested too much.

You no longer own your business – your business owns you.

Welcome to the Stage II Enterprise! 

Stage II Enterprise: By The Numbers

Imagine that. There’s actually a name for the current state of your business existence. 

As a Stage II Enterprise, you’ve moved beyond startup. During the three to five-year period of business ownership, you’ve proven your business model and achieved some level of sustainability. (Insert sigh of relief here.) 

Annual revenue is between $350,000 – $1 Million. And, although you “enjoy” some fluid cash flow, revenue is stalled. Your response? Tighten down the hatches and work harder!

You manage a team of 5–15 hybrid employees and freelancers, which allows you to expand and contract as dictated by cash flow and opportunities. 

Sadly, your talent pool is a bit stagnant with unqualified hires stemming from the earlier, inexperienced days of business ownership. 

Employees haven’t grown with the organization and because pay may not be aligned with the labor market, you’re hesitant to ask them to step up their game.

Plus, as the former “lone ranger,” you are accustomed to “doing it all” yourself. You either don’t know how or are uncomfortable delegating to the staff. Staff is underutilized.

Your ability to survive missteps, misjudgments, and bad decisions is real. With little to no time focused on forwarding movement and strategies needed to grow the business, the ability to remain relevant is challenged.

And yet…

You know what it takes to run a business and have the aptitude and appetite to continue growing.

Stage II Enterprise: The Information Gap of the Entrepreneur

As a Stage II Enterprise, the marketplace does not serve you well — if at all. Few sources exist to provide you with the proven strategies that work.

A colossal information gap exists between startup, stage one business growth and development, YOU, and the corporate behemoths; information vital for solving the problems of your enterprise.

What you long for — and need — are effective strategies to accelerate the process of stopping the stall and getting to the next level.

Stage II Enterprise: Bridging the Information Gap

To turn a stall into success requires navigating complex challenges, especially in times like this. It’s a strategic balancing act to test the boundaries of what is possible, understand the limits of your business, and maximize its potential. 

Although your chosen strategy is business dependent, there are several problems to solve, such as: 

  • Inability to focus.
  • Sense of overload, overwhelm and overburden by the current business environment.  
  • Limited access to resources needed to succeed like money and talent. 
  • Poor deployment of resources such as staff, time, and money.
  • Cloudy thinking accompanied by poor decision-making. 
  • Lack of a clear direction, plan, or focused execution. 
  • Missing knowledge or skill.  Not knowing what you don’t know. 

Despite the challenges faced, you want to put your talents to use, grow your business, and make smart decisions. Good for you! 

The question remains — where do you start? Don’t worry. We’ve got your back!

_______________________

Connect with Community. Contribute to the Conversation. 

Visit our community platform to connect, commiserate, collaborate, and collude with like-minded Stage II Enterprise entrepreneurs on what it takes to rise above your growing pains.

Small Business Goals: The Only Thing You Need to Know to Set & Achieve Them

Posted by
Jackie Nagel, Synnovatia

Small business goal achievement is a challenge. In fact, more than 80 percent of the 300 small business owners surveyed for the Staples National Small Business Survey say they don’t keep track of their business goals. Yikes! 

Based on that alarming stat, it’s easy to understand why 77 percent of business owners struggle to achieve their vision. What is this nefarious “thing” thwarting our efforts? 

Truth be told, it’s challenging to know what gets in the way of achieving our goals.

The Nightmare On Goal Street

You’ve learned how to set goals. You set a target or two in your lifetime. What kind of success did it create? Did you achieve your objective, or, like some, did you miss the mark?

If you stray from your target, it doesn’t endear you to set another destination. It often opens one up to crushing disappointment and an accompanying litany of failure. <Insert damaging self-talk here.>

Many small business owners are desperately afraid to set objectives. It’s much like Pavlov’s classical conditioning theory, where habits and subsequent behavior are learned by the repetitive association between the response and the stimulus. If you’ve set and missed your target enough times, it’s plausible you’ll want to avoid the painful “shock.”

Think about it. Continually missing your goals is painful! The stress that accompanies unachieved goals is staggering. That’s likely why four-fifths of goal-setters make it to Valentine’s Day. The other 20% make it to the end of the quarter. Sadly, that means only 8% successfully achieve their intention.

small business goals

The Road to Small Business Goal Achievement

Despite the statistics, goal setting is the most important business strategy for optimal performance. Investing in goals displays greater persistence, creativity, and risk-taking. It’s the ultimate anti-procrastination strategy.

A Dominican University study conducted with 277 participants revealed some encouraging results on how to set and achieve goals effectively. Here is what they discovered: 

Participants were randomly assigned to one of five groups. Following four weeks of pursuing their goal,  participants were asked to report on their goal achievement. They were also asked to rate the goal on the following criteria:

  • difficulty,
  • importance,
  • availability of skills and resources needed,
  • motivation and commitment,
  • whether or not they had pursued the goal before and, if so,
  • their prior success.

Those in Group 1 were to think about their goals for the next four weeks.

Participants in Group 2 were instructed to write their desired accomplishments and rate them as above.

Group 3 was asked to write their goal, rate them, and formulate actions to achieve their desired result.

Group 4 was instructed to write their intended achievement, rate it, formulate actions, and send their targets and actions to a supportive friend.

And, finally, participants in Group 5 wrote and rated their goals, formulated actions, and sent their plans to a supportive friend along with weekly progress reports.

The results? Seventy percent (70%) of the participants who sent weekly updates to a friend reported successful goal achievement! In fact, 76% of the participants in Group 5 achieved their targets or were more than halfway to achieving their goals, compared to 43% of Group 1. 

The Meaningful Takeaway

The results of this study demonstrate the effectiveness of coaching tools, including: 

Setting and implementing goals is still the best way to realize success. With this critical skill, we function as champions in our business.

Are you ready to step out to achieve those all-important goals? If so, consider sharing your goals and progress with a friend. Or, better yet, join us at The Messy Middle!, where CEO’s, Founders, and Small Business Owners collaborate to make their business work better.

 

Insights on Goal Achievement: Shared Characteristics of Achievers

Posted by
Jackie Nagel, Synnovatia
goal achievement

What makes one business thrive while another flounders with goal achievement? What qualities and characteristics are common among goal achievers?  And, what draws individuals to embrace a framework for achieving their goals? 

These are the type of questions that keep me awake at night — that and did the neighbors cat make it home okay. 

To find out, I went where we all go to solve the mysteries of the planet. Google. 

My search for “qualities and characteristics of a goal achiever” was revealing. In that, it provided no further insight into the workings of the goal achiever mind. 

goal achievement
Photo by Guille Álvarez on Unsplash

Most of what showed up in my Google search were ‘how to’ set goals. Included in my findings were the characteristics of an excellent goal-setting system. Think SMART, which has been done to death.

Given that, I decided to do a bit of deep dive into my experience. (I do run a goal achievement mastermind, after all.)

The Goal Achiever Vs. Goal Achievement

After two decades of guiding business owners along their growth journey, this is what I can tell you…

The most successful – by that, I mean those most likely to achieve their goals – have shared qualities. 

They have a goal-setting mindset likely developed at a young age. 

They are forward-thinking with aspirations for their business. Their enterprise is more than a day-job replacement. 

They crave focus and clarity. Those are non-negotiable for their performance.  

Baked into their DNA is a commitment to life-long learning. They re-evaluate, revise, and reboot their plans if they miss the mark. 

They dislike vagueness, overwhelm, and chaos.

They expect the best of — and from — themselves. They have great pride in the quality of their work. 

A deep-seated optimism keeps their eyes focused on the horizon. 

They are much more gifted and talented than they recognize in themselves. It’s likely what keeps them humble.

They know how to lighten up, have fun, and laugh — mostly at themselves. 

So, achieving goals is about the essence of the individual. A goal achievement framework is a tool used to achieve outcomes. 

An artist has a favorite brush.  My landscaper has his versatile Hori Hori knife. The goal-achieving entrepreneur’s tool for performance is the goal-achievement framework.

The Often Overlooked Strategy: Year End Celebration

Posted by
Jackie Nagel, Synnovatia

Isn’t it astonishing when you consider that the year is coming to a close? It was only last week – or so it seems – you were making plans for the upcoming year.

Like most optimistic entrepreneurs, you executed your strategic options flawlessly. And, like many entrepreneurs, you discovered some of the strategies got you closer to your objectives and others – well, let’s face it, you wasted paper creating them. Despite wrapping up final figures, there remains one strategy requiring your attention: celebrating your achievements.

Regardless of your successes or failures, it’s worth noting that if you’re reading this, you’re still in business! The fact that the doors to your business remain open means two things: you did many of the right things and you did many things right.

Before you break out in “Auld Lang Syne” and pop the champagne on the new year, let’s put 10 minutes on the clock and see how many achievements, large and small, you have realized this past year.

Here are some questions to get you started:

  1. What did you learn that accelerates your growth moving forward?
  2. What did you learn that you know you’ll never repeat?
  3. What new skill did you add to your quiver?
  4. What skill was improved or strengthened?
  5. Whom did you meet that positively influenced your business?
  6. What area of your business is stronger today?
  7. What are you able to see along the horizon that wasn’t visible last year at this time?
  8. What events did you attend that were new and/or different this year whether it was for networking, marketing, or seeking assistance that caused you to stretch your comfort zone?
  9. What was your most proud moment?
  10. What can you say about yourself or your business today that you were unable to say last year at this time?

As you consider the response for each question, you’ll undoubtedly agree that despite the balance sheet or bank balance, you have much to celebrate that will serve you well long after this year has become a faint memory.

From our business to yours, we wish you a stellar new year!

4 Types of Business Strategies to Fast Forward Your Growth

Posted by
Jackie Nagel, Synnovatia

There are a few things in business that are optional especially if you intend to keep the doors open and the lights on. Business growth is NOT one of them. Growing a business in any economy is not for the faint of heart. Growing a business — minus a strategy — is a major drain on your resources triggered by half-baked decisions.

To paraphrase author, Richard Rumelt, in his book Good Strategy Bad Strategy: The Difference and Why It Matters, setting strategy is not a game of establishing goals. Strategy is how your organization moves forward. Strategy is the craft of figuring out what is worth pursuing with the capability of accomplishing. It’s a cohesive approach to moving forward that requires you to say “no” more often than “yes” to what lies ahead.

Show Us Your Growth Strategy

When asked which strategy is ideal for your small business, the not so very satisfying answer is — that depends . .

Strategy is an area in which one-size-fits-all doesn’t work. In fact, when crafting a strategy that is the right fit for you and your small business, there are several aspects to consider.

Our friends at the Houston Small Business Chronicle suggest using the PESTLE analysis when identifying a clear business strategy. PESTLE stands for political, economic, sociological, technological, legal, and environment. Taking these considerations under advisement, combined with your mission and vision, helps identify the potential opportunities and threats that ultimately influence your selection of strategy.

Common Core Strategies: The Big Four

Although there are different types of business strategies available, you want to select the growth strategy most appropriate for your business. In the absence of a full analysis and customization of your business strategy, you may find it helpful to select one of the most commonly known strategies.

  1. Diversify – Does “don’t put all your eggs in one basket” ring a bell? If so, that sums up the diversify strategy. Developing new products in new markets can be a riskier strategy given the unproven marketplace. However, if innovation is a business value (think Apple, Inc.) it may be worth the risk as long as you understand what’s at stake. Strap on your tool belt for this strategy, though. New skills and knowledge required for success.
  2. Market Development – One of the more common growth strategies selected by many a mature entrepreneur is to expand existing products into new markets. It makes sense. Once you’ve proven your business offering in one market, your acquired knowledge and skill can potentially support growth in a new market. The new market may be industry-related or geographical. This type of transition doesn’t happen without proper planning, however. A keen understanding of the new markets — and its competitors — is important if you’re going to make head way.
  3. Product Development – Probably one of the most comfortable strategies for entrepreneurs is introducing new products into existing market.  This is commonly called the product development strategy and mirrors the market development strategy. It requires a keen eye and detailed-attention to pay attention to the ever-changing needs of your clients to figure out what innovation they are ready to adopt. Even if it appears to be an easier strategy to implement, it doesn’t come without challenges. New business skills and continual tweaking are needed until success is achieved.On Strategy does a nice job of poking the brain cells with their product development strategy teaser. Here are a few ways to extend your current offering:
    • Adapt (to other ideas and developments)
    • Modify (change color, motion, sound, odor, form, shape)
    • Magnify (more for a higher price, stronger, longer, extra value)
    • Reduce (smaller, trial version, shorter, lighter)
    • Substitute (other ingredients, processes, power)
    • Combine (other options, products, ideas, assortments)
  1. Market Penetration – What’s an entrepreneur to do when new products and/or new markets don’t exist? When surrendering is not an option, expanding your current products in your current market is the way to go. Be prepared to do battle, though, should you adopt this strategy. In order to snag a larger piece of the pie, you’ll be seizing some of your competitor’s market share. They may not take kindly to that.

As you can see, there’s a bit more than wishful thinking when it comes to business growth. However, setting aside some time to conduct a thorough analysis and custom-design your business strategy can certainly give you a leg up on growing your business.

Start with a Free Consultation

The Power of a Business Assessment on Your Business Goals

Posted by
Jackie Nagel, Synnovatia

If you’re like most entrepreneurs, you’re moving at a mile a minute. With so much to do to run a successful business, and even more to learn, it can be challenging to find time to develop the key strategies to move your business forward. Even if you did have the time, would you know what projects would move your business forward? A business assessment can help identify the business growth and development opportunities in your business. 

A Business Assessment Delivers

There’s more to a business assessment than meets the eye. Some entrepreneurs assume a business assessment points out what’s wrong with their business. Although that’s one perspective, we prefer you use the business assessment as a tool to identify opportunities to grow your business rather than as a weapon against yourself or your business.

More importantly, a business assessment:

  • creates clarity
  • helps you learn
  • allows you to plan
  • promotes strategic use of your time
  • identifies business areas to strengthen
  • provides a foundation for smart business decisions

How to Use a Business Assessment

One of the greatest challenges with running a small business is taking the time to step back from your business in order to objectively evaluate what’s really going on. A business assessment provides the fair and impartial vantage point needed when making sound, strategic decisions about the direction of your business.

Select a business assessment tool that identifies insights for your size business. All you need is to run a google search for “business assessment” and you’ll have a plethora of assessments to choose from. Or, you can download the Core Business Assessment we created for service firms with less than $500,000 in revenue or manufacturing companies with less than $1.5 million in revenue. Even if your business has receipts greater than $500,000, it might be worth conducting the business assessment to uncover any opportunities to shore up your business.

Be truthful when evaluating the condition of your business. Although it’s natural for the always-optimistic entrepreneur to see the current status of their business through rose-covered glasses, it’s really in the best interest of your business to be objective during the business assessment process to get a clear picture of what’s really going on in your business. And, if you’re unable to maintain impartiality, admit it and engage a trusted advisor to assist.

Make note of your progress. Pay special attention to the elements of business development already completed. Give yourself credit for your achievements. Remember, a business assessment is not  to berate yourself but rather to identify the next piece of development that awaits you. Growing a business is an ongoing learning opportunity. Your business assessment helps identify the learning on your horizon.

Identify the next best piece of business development. Although you’re likely to identify several focal points of business development available to you, it’s overwhelming to focus on too many aspects simultaneously. Select the one opportunities you can achieve within the next three months. By remaining focused on “the one thing,” you’ll find it easier to evolve and grow your business while maintaining the business you currently have without adding unnecessary stress to your life.

Repeat the business assessment process quarterly. Building a business assessment practice into your quarterly planning guides you through the growth and development of the essentials needed to grow your business to success that is sustainable and predictable.

A business assessment ensures your business has what it needs to deliver on your goals. It helps you expand and grow your business in a way that is smart and strategic. It provides a solid foundation for making sound decisions.

Most importantly, the real power of a business assessment is the process itself. It’s the time when you put your business on pause, step back from the day-to-day grind of running your business, to objectively evaluate what your business needs to make sure it’s headed in the right direction.

The Benefits of Strategic Coaching to Manage Change

Posted by
Jackie Nagel, Synnovatia

It was the fall of 1995.  A United States aircraft carrier was cruising off the coast of Newfoundland when the radio operator notified the bridge of a rapidly approaching vessel. The Captain immediately got on the radio and requested the Canadian vessel to divert it’s course 5 degrees to the south to avoid a collision.

To this, the Canadian radio operator requested the U.S. carrier to divert it’s course 15 degrees to the south to evade the collision. This went back and forth until the Captain of the U.S. aircraft carrier, rather indignantly responded, “This is the aircraft carrier USS Coral Sea. We are a large warship of the U.S. Navy. Divert you course immediately. To this the Canadian radio operator replied, “This is a lighthouse. Your call!”

Ouch! This chronicle aptly describes the life-altering phenomenon known only too well as a stable of the 21st Century — change. Known for striking angst in the hearts of even the most fearless, change is constant. And, if there was ever a time to be cognizant of what’s to come…it is NOW!

It appears the long-held rumor of a pending economic slowdown for 2019 – 2020 is true. Global economist and one of Time Magazine’s 100 Most Influential People in the World, Dr. Dambisa Moyo, attributes it to “growing inequality, a workforce ill-adapted to rapid technological change, political instability and a massive debt burden on governments, corporations and individuals.”

How will you prepare yourself and your business to withstand the inevitable and achieve your strategic business goals? Unlike the economic upheaval we experienced in 2008, let’s consider ourselves informed and act now to implement strategies to strengthen our business.

Change is an expected part of business. By expecting, embracing, and preparing for it, you lessen stress, minimize resistance, and make solid progress.  In the meantime, use these fundamentals as anchors to aide you in staying on course.

  1. Beliefs. Know that which is true about your staff, your self, success, your earning aptitude, and your growth capacity to hold on to your uniqueness during stormy times. And, most importantly, own what you know. Question yourself less.
  2. Vision.  A vision that is crystal clear — easily stated in one sentence — is inspiring to attain. Minus the ‘one sentence rule,’ head back to the drawing board for further clarification. Feel free to snag this little gem if you don’t want to go it alone: The Small Business Vision: Why it Matters More Than (Fill in the Blank.)
  3. Mission. Your mission is the reason you’re in business. It answers the question “what do we do.”  This is especially valuable for those of us who work in isolation in our bunny slippers. Mission reminds us of what’s important as we stare into our cup of joe.
  4. Values. The cornerstone upon which your business is made up of your key values. They play a powerful and influential role. And, when used to your advantage, values make your business more enjoyable and successful. 
  5. Gifts and talents.  The genius of you and your staff is making the most of every opportunity and challenge through your best assets. The use of these one-of-a-kind combination of strengths and genius makes your business incomparable.
  6. Principles – When times are tough, an entrepreneurs true colors are revealed. Doctrines, ethics, and ideologies serve as your rudder. They allow you to remain steadfast in running your business in the face of acclimation to a new reality.
  7. Standards – It’s difficult to imagine a world without standards. Personal performance benchmarks and standards to which you hold yourself and your staff speaks volumes about the reliability of your product and  service.
  8. Sense of humor – Studies show laughter and humor bring an array of benefits to the most difficult of circumstances. In addition to reducing stress, humor increases energy — an important asset while managing change.  “Every time you find some humor in a difficult situation, you win.” ~Unknown. 

The bottom line? In the face of mounting change, don’t panic. Remember — you have invaluable resources at the ready that are certain to carry you through the most difficult of times.

The Business Strategy of Network Effect & Its Impact on Your Ability to Scale Your Small Business

Posted by
Jackie Nagel, Synnovatia

If there is one objective shared by almost every small business owner, it would be the capability to scale their small business. Scaling, unlike growth, allows you to increase your revenue substantially. Minus the addition of significant costs, profits are greatly enhanced.

Growth, in comparison, means adding resources or infrastructure to handle greater demand. A growth in revenue is generally accompanied by an increase in cost. Subsequently, although your business revenue grows, you may not experience a growth in profitability – or scalability.

One of the best ways to make your business scalable is to apply the business strategy of network effect.

Say What!? What is Network Effect?

Network effect first came into being as early as 1908 when Theodore Vail, the first president of Bell Telephone, gained a telephone monopoly. It was later popularized in the tech industry by such giants as Robert Metcalfe of 3Com and Rod Beckstrom of ICANN.

Essentially, it’s a phenomenon whereby a product or service gains more additional value the more people use it.

Examples of today’s network effect include Airbnb, Google, and Facebook (although it’s arguable — and a matter of personal opinion — of the additional value of Facebook). Certainly, the internet, itself, is a good example.

When the internet was first conceived, there were few users. Those who were online derived value from its use. However, as more and more of us went online, the value of the internet to everyone online increased exponentially.

The Value of Network Effects for Small Business

Let’s face it, as a bootstrapped solopreneur in the service industry, you trade time for money. Your business model very likely looks like that of a lawyer, accountant, designer, or consultant. It requires you to be there — to be present — and put in time to generate revenue. You and your client exchange time and expertise for money. It’s that simple.

The problem with this model is that there are only so many hours in a day. Even at that, few service-based professionals are 100% billable. It doesn’t take long before your ability to generate revenue is capped.

Granted, you can hire other skilled professionals to grow your revenue capability. However, it’s merely a “rinse and repeat” of the same model with revenue capability capped as the number of billable hours is achieved for each person in your employ. Economies of scale are difficult, at best.

And, if you’re like many of the business owners I chat with, you really don’t want to be managing a gaggle of people. Thanks, but no thanks.

The application of network effect for the small business owner with minimal resources can create a huge advantage in your ability to scale. As more users are added, greater value is created by and for all users.

This dramatically reduces your individual work load and requirement to be ever-present. Plus, costs are easier to control and maintain making your product/service more affordable. This affordability factor attracts more users and the entire cycle repeats itself.

Additional users => more use => additional value created for all users => cost containment => greater affordability => further users.

Me, too?

Not every business can, nor should they, attempt to inject network effect into their business model. But, for those who can — and should seriously consider doing so — here are a few considerations as you begin the process.

1) Consider what type of product or service is currently being used by a high volume of people and considered valuable and incorporate that particular product or service into your business. An example might be a credit card.

2) Study the most valuable product or service that your business provides that currently engages the most users. Consider how you might leverage that product or service using network effect.

One of the most valuable services being generated by most service-based professionals today is content — good, quality content. In fact, although the internet is choking itself on an overabundance of content, the truth is that most of it is not good or helpful to the end user.

By leveraging your content to inform, educate, and spark conversations among readers, you begin to create greater value for everyone who consumes your content. The conversations and contributions made by other readers expands the knowledge and understanding of the topic, beyond your original contribution — as long as, of course, that quality (content and user) is upheld.

3) Focus on one target customer in one location and perfect the model…like McDonald’s did before becoming a franchise behemoth. Create your micro niche.

4) Set up conditions for other people to collaborate and connect and cause each other to grow. Consider how each new client (aka user) can be made more valuable to each and every client.

The Bottom Line

Henry Ford said, “Coming together is the beginning. Keeping together is progress. Working together, is success.” By leveraging the increasing value of your product or service as the number and quality of users grows, you can more quickly scale your small business…with less work needing to be done by you!

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Brooke Billingsley

Vice President
Perception Strategies

Synnovatia is a strategic coaching firm that is detailed and knowledgeable about business. i have a small business that grew from $150K to $750K because of the goal setting and resources that Synnovatia provided. It saves me years of learning on my own.

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