How do you build something small into something bigger and more sustainable? Keep these core ideas in mind.
Many businesses start with an idea and create something lasting. More often, they start with a spark of some sort--a strategic asset, a reputation, a track record with customers, or even an advantaged piece of real estate. The goal--and the core challenge--is to build the spark into something bigger.
We're all familiar with the challenges of growing a small company: limited resources, limited capital, limited profits, and limited time. Your competitors are often better equipped and able to move faster. Even if you have an advantaged product or service, your customers might not have the awareness to make the right choice.
So how do you create something from nothing, or parlay your initial successes into continued growth?
Here are six principles around building a business that we've learned from working with companies of all sizes.
-Building businesses takes a unique combination of strategy, execution and competitive advantages in attractive markets.
-Ideas are not worth much if not supported by effective execution that creates customer value.
-The best strategic insights come from a test-and-learn approach: receiving real-time customer feedback and response and measuring the return on incremental investment.
-Larger companies generally have the best building blocks to create and grow advantaged businesses, but they often lack the management talent, incentives, and organizational skills to create entrepreneurial growth. Coupling strategic advantages with an entrepreneurial team and culture can create more lasting economic value.
-The best strategies come from a deep understanding of the facts around customers and markets. Most leadership teams can align on a clear strategy if they can align on the facts.
-Advantage is created by investing in areas that create customer value. Identifying these high-value areas is core to any growth strategy.
What principles would you add to this list? We'd love to collect your thoughts and include them in an upcoming article.
KARL STARK AND BILL STEWART are managing directors and co-founders of Avondale, a strategic advisory firm focused on growing companies. Avondale, based in Chicago, is a high-growth company itself and is a two-time Inc. 500 honoree. @karlstark