Continuously identifying and implementing growth strategies is essential to business survival. However, making the wrong choice can be extremely harmful to a small business. Failing to develop an accurate picture of market demand, choosing the option with the greatest perceived impact over the one that will deliver results more quickly, making a decision based on input from the wrong people and relying on the wrong people for implementation can all result in failed strategies. Taking the right steps to avoid these pitfalls will contribute considerably to the odds for success. Following are 5 common pitfalls to avoid:
- Failing to Assess Market Potential – Market potential can be one of the biggest illusions in business. Analysis and market surveys are always a good and necessary starting point. However, it’s possible to incorrectly estimate growth through new markets or products if decisions are made based only on data. Test marketing will give a more accurate picture of potential sales. This can be done by targeting a small segment of the market or offering a limited portion of the service type to gauge actual results. A thorough the market assessment will reduce the risk of failure.
- Choosing Big Over Fast – Often decisions on strategy involve choosing between alternatives that offer different benefits. One may be expected to result in a higher rate of business growth but may take longer to implement than other alternatives. There are exceptions to every rule but usually it’s more advantageous to implement the strategy with the quickest anticipated results. The natural inclination is to favor higher growth but the pitfall lies in timing just as much as timeliness. If there is a long implementation period not only will results take longer to materialize but there’s more of a chance that market conditions will change.
- Basing the Choice on Input from the Wrong Customers – Every successful business has trusted long term customers. When considering strategies that target existing markets input from these people can be extremely valuable. But when considering new markets information should be garnered from that group of people. Different markets employ different decision making processes.
- Relying on the Wrong Employees for Implementation – Employees that are able to maintain control and ensure smooth running business processes are invaluable. Without them business will not succeed. But people that strive to adapt any circumstance to existing business processes may act in ways contrary to the demands of new markets or service offerings. The wrong implementation methods can cause a strategy to fail. So it’s important to realize the necessity to step outside existing processes when implementing growth strategies.
- Failing to Recognize Differences in Markets – This is one of the most prevalent mistakes in implementation of growth strategies. For example if a company’s primary market is the individual vehicle owners and they decide to grow by targeting businesses the biggest mistake possible is to use the same marketing, sales and delivery methods employed with consumers. This is a sure path to failure. The requirements for these two markets are completely different.