Business Growth
Some of the statistics are quite interesting. Over the three and a half decades I have been watching the growth of Franchising, it has sat at around 8-10% each year, It’s a bit low at the moment because there is bit of squeeze in the economy so it is reflected but the truth is growth in the franchise sector far out accelerates traditional business growth.
In the late 80s at Harvard, they did a study on business growth and found business goes through 5 stages.
Stage one is where the business concept is proven. Stage two is growing the business so it becomes profitable, Stage three is getting to the stage to have a handful of staff that will allow the owner to have a holiday or two. The reality is it most businesses do not expand to create multiple outlets until about 18 years old.
The Harvard team concluded one way to accelerate growth is through the franchise model because it is a much simple and quicker way to replicate your business.
Most people here are at Stage three – Success, but getting to Stage four – Take off, really is the challenge.
So many businesses today have not reacted well to the digital changes which have occurred in the past 10 years or so and probably 80% of businesses and franchises I think are way behind the times and will need a bit of revolution to survive over the next decade. From what I see, what’s missing is the Sixth step – demise, because last year alone 55,000 small businesses closed. These statistics are pretty scary but fairly consistent
The small business journey is very high risk So when you look to be a successful business, you need to understand the stages and move through them fast to Take off. I am sure I am not alerting you to things you have not heard of but just remind you need to tick these boxes really well if you going to grow your business because otherwise you run the risk of really having a half-prepared machine. It’s a bit like having a Grand Pre car. If you haven’t got it tuned properly or haven’t got the right tyres on you will never get through.