What's your growth rate?
Each year we set the target. We want to see revenues and profits increase. We are motivated to grow the business.
Interestingly, the number most entrepreneurs choose for the annual growth of their business is 20 per cent. It’s a nice round number. We set it, talk to our team, and hope that it happens.
Now, it didn’t happen last year but there were a lot of reasons for that. And the year before, well, things were happening and we got distracted. But this year, it is going to be different.
The tough question is, will it really be different this year? It doesn’t come down to the growth target but rather, what will drive it.
If we look at the data (no groaning, just a few numbers for perspective) the average growth rate for small and medium businesses in Canada is about three per cent. Right on the dot – three per cent. This is what Industry Canada found the average to be for entrepreneurs, since 2000. A bit shocking, right? We set 20 per cent goals but three per cent is the reality.
Less than four per cent of all companies saw annual growth of 10 per cent per year for three years running. For 10 years, at 10 per cent per year, the average number of companies drops to less than one per cent. How many companies make 20 per cent for three years straight? Let’s not even talk about it. The percentage is a bit on the small side, but maybe you were the one?
Is 20 per cent reasonable? Industry Canada recently poured over sample yearly SME financial statements and found the potential average growth rate that entrepreneurs could have achieved was just 7.2 per cent. That’s a bit of a gap from 20 per cent.
Unless you have something incredibly unique in terms of opportunity, offering, process, experience, or niche, 20 per cent is a big goal that will likely only deliver a whole lot of disappointment.
If you set a goal of 20 per cent and made even half of that, you would likely feel disappointed, despite the fact that you would actually be in the top 4 per cent of all businesses!
If you had set a realistic goal of around 8 per cent, that 10 per cent growth would look and feel a lot more like an accomplishment.
Our expectations play a significant role in our ability to achieve success in our businesses. Pushing one’s self to do better every day is the ultimate modus operandi for many entrepreneurs, but setting targets that are not based in realistic data saps that passion and tires us out, sets us up for disappointment and drains the energy of everyone around us.
Hope is a bad strategy.
I think there’s a really effective starting place for growth that most entrepreneurs overlook.
From what I have seen in my personal experience and working with entrepreneurs, we have to first set a growth strategy for ourselves before we grow our business.
If we’re not personally growing ahead and separate from our various endeavors, success can become misattributed and convoluted.
Here’s an example: imagine a business owner who considers his personal success to be correlated perfectly with the success of the business he is operating. Should his business experience hard times, those hard times would readily manifest in the business owner’s self-esteem, self-worth and personal identity – further increasing his decision making faculty’s impotency.
Had our business owner saw his company as a tool to help achieve some of his personal goals, instead of an endeavor from which his success was solely derived, he would be in a better place to make objective business decisions, especially through the hard times.
So, what is a reasonable growth target for you personally?
What you really want to see for your own growth is a development of your capabilities as a leader. To execute a plan you need to be able to lead it.
Leadership on a personal level usually comes down to relationships and how we connect with people, self-awareness and understanding our strengths and interactions along with the broad ability to continue learning in all areas, and, dare I say it, taking time to relax, reflect, and take care of ourselves. As the old saying goes, "you can’t help others until you help yourself" – you can only give what you have.
My advice for you is to set one goal for your own growth this year. It should have nothing to do with the business; it’s about you and your own personal development.
Where do you start?
Questions are always the starting point for reflection and finding your way. There are four questions I ask myself every day that can be an initial step to setting a personal growth goal.
- What was positive last year (what am I most proud of achieving)?
- What did I learn last year?
- What did I do particularly well last year?
- What am I most grateful for last year?
These four questions are the supports for your confidence.
What keeps you going is a combination of achieving positive things, learning new things, doing something well, and recognizing what you have. With those answers you can look at how you can build on them this year and make it an even better year, next year.
For me, I learned that relationships are the most important part of life. When I look at the best parts of last year, each and every event involved being around someone positive and encouraging. So, for this year, I want to make that my own personal goal. I want to spend more time with those people and also find others like them to give me a stronger network. Spending that time will bump my energy up and put my mood in the right place so I can bring a higher level of productivity and creativity to work. I can better lead the growth of my business from spending time with people who make me feel good.
You may have different answers but it comes down to what will help you grow as a person so you can bring that to the business and be ready for growth. Think about what will help you grow mentally, physically, emotionally, and spiritually. Finding the one most important thing for yourself can be an enlightening experience.
You don’t have time to do things for yourself?
If you don’t make time for you, you will not make it happen. You will limit the growth of your business and possibly burn out, or worse. You are worth the time you invest in yourself. You are worth every minute of that time.
20 per cent? No question you can do it, but it must start with you.. Putting time into your own growth ahead of the company so you are in the right place to make it happen is the key to stable growth.