Recipe For Fast Business Growth
The team behind the Deloitte Fast 50 programme asked leaders of participating businesses what makes them different from other companies in New Zealand?
New Zealand has over 455,000 small businesses representing 97.2 per cent of all businesses generating about a third of our GDP. But only 30 per cent of new businesses are still trading after five years and only ten per cent will make it to their tenth year.
So with this kind of failure rate how do new businesses thrive?
Successful companies will have a defined brand, a sense of purpose and clear strategy. They are innovative and either at the cutting edge of or at home with technology. They have invested in governance, people management and management processes and will have the capability to raise capital and are probably exporting goods and services off shore or will have the potential to do so. They also will be very successful at growing revenue.
But the most important element for a company’s fast growth comes down to leadership.
Leaders of growth companies tend to be single focused and lead from the front. They know where the business is heading and find ways around all obstacles to get there.
They still require the skills to navigate the business through the different stages in the life cycle of a company. Fighting for survival as a start-up, creating good cash flow and building a customer base and then maximising the opportunities.
However Lack of capital is often blamed for hindering SME’s growth.
Investors are available to those businesses that can demonstrate professionalism, a business plan, credible management processes and a governance structure and of course a return.
Taking on good advice can be extremely beneficial for SMEs.
Advisory boards can rejuvenate a business and drive the conversation back to those issues of strategy, purpose, planning, management processes and accountability. Professionals can challenge owners to try different options to further growth.
What does it take for a SME to grow?
The team behind the Deloitte Fast 50 programme asked leaders of participating businesses what makes them different from other companies in New Zealand? These are what they found to be the winning qualities:
Purpose/strategy – a business must know where it is going and how it is going to get there in order to grow.
Governance – there is a board or an advisory board.
Capital – one of the biggest challenges that a growing company faces. Businesses need cash flow and capability around capital.
Innovation – not just a new product, it can mean delivering a product in a different way.
Process – back office systems and procedures, such as human resources and finance, should be well mapped out.
Brand – it should be clear to the customer what you stand for.
Exports – New Zealand is a small market, so most Fast 50 companies seek customers overseas.
Technology – growth companies usually leverage technology to be competitive, either in their products, services or internal systems.
People – a growing company needs to attract and retain good staff from an early stage.
Visionary leadership – the person who is at the head of a growing business should be focused, visionary and able to communicate the goals of the company.