Do You Have a System for Business Growth?Feb 10, 2021
We as business owners (especially for those of you in industrial categories) tend to be fans of systems. Whether it’s an operating system, Lean or 6 Sigma, systems organize our processes for greater predictability and stability. Systems are how we keep “the wheels on the bus”.
But there’s one area of business few owners have “systematized”: their revenue growth. And as a result, they find growing their revenue a frustrating, unpredictable, unwieldy process.
What if you had a comprehensive system for business growth, one that gave you an organized method to align all parts of your business towards growth?
Now obviously, we have our own approach to this at Value Prop, called the Revenue Throughput System–but today, I want to show you how to apply core systematic principles to your growth strategy.
I think you’ll find that the sense of stability and predictability you love about your other systems can work here too.
System Principles: What Makes a System?
Systems aren’t any new idea. Again, most of your business probably already operates on a systematic basis. You take a process you want to repeat and improve over time, you codify it, and you implement it.
Just about any system is built on the same principles, and if you can apply them correctly, you can enjoy the benefits that systems provide. Even with something as big as business growth.
So what are these principles?
1. A System Starts with a Goal
Okay, I know this sounds obvious, but it’s a point that can’t be missed. Systems are created so that we can achieve a result we consistently need. Your digestive system consistently turns food into energy. Your heating system heats your house. Duh.
But what about your revenue growth? What is your actual, hard-numbers growth goal? Defining this number is the critical first step to building your growth system--because it gives purpose to everything else in the system.
Once you’ve established and clarified your goal, it’s time to dive into the steps you need to take to reach your goal. This is where systematic business growth gets more interesting.
2. A System Requires Collaboration
Any goal that requires a “system” is inherently complex–which is why growing your business is more than just a “task” (and can quickly become a headache). A system requires its every component to support its end goal. No part is irrelevant. No effort is wasted.
When it comes to business growth, this is where many owners stumble. They know that everyone in their organization has a hand in growing the business–but getting their marketing people on the same page as their production people is a different story.
A systematic approach to business growth involves getting every facet of your business aligned on what it has to do to support growth. This means setting “benchmark actions” that will focus everyone’s effort to add up to big progress–while saving your time and resources.
3. A System Should Give You Feedback
The kind of “benchmarks actions” that systematic business growth requires are not just motivational–they also alert you when something isn’t functioning properly. Even a simple “system” like making a PB&J can illustrate this point.
You’re setting up all of your supplies to make the world’s best sandwich when you realize, oh no, you’re almost out of peanut butter! Those last smears at the bottom of the jar are way below your peanut butter benchmark.
At that moment, your system for making lunch has a clear point of failure: it wasn’t the bread, it wasn’t the jelly, it was the peanut butter. When you hang your head and walk away hungry, you know exactly why.
Now, obviously a system designed to deal with something like business growth isn’t quite that simple--but it is possible to have an equally straightforward way of detecting where your growth system is failing. It involves:
- Setting your growth goal
- Understanding how each component of your business supports that goal
- Setting clear benchmarks across each component
- Giving your team the tools and resources they need to accomplish those benchmarks
- Following up on progress and troubleshooting problems
Okay, you’re probably thinking “Yeah, sounds possible...but cumbersome”, right? Hang with me, it gets simpler.
How to Build a Business Growth System
So, we’ve gone over what makes a “growth system” a growth system. But how do you actually go about creating your system? How do you actually set up your goals, benchmark them, delegate them, track them, and SEE progress?
While there are plenty of resources you could find to support you in each of those actions, my guess is that you’ve already got enough on your plate as a business owner.
So we’ve made it simple for you here at Value Prop with our Revenue Throughput System (or RTS for short). It’s a system you can use to grow your business, one that starts with diagnosing what areas of your business are hindering growth and supports you and your team through optimizing your business for revenue.
Using those three “systems principles” above, let’s look at how the Revenue Throughput System will help you drive business growth systematically.
1. The Goal: Unlocking Your Revenue Throughput
You might have any number of goals for your business (like creating employment opportunities for your community, leaving a legacy for your children), but with the Revenue Throughput System, we focus on one goal only: growing your business by unlocking your revenue throughput.
Revenue Throughput is the volume and velocity that your business can convert opportunities into revenue. It’s our proprietary model for helping business owners get a comprehensive understanding of business growth. Here’s how it works:
“Throughput” means the amount that a substance moves through something else, like water through a pipe. So when we say “Revenue Throughput” we’re talking about how much revenue is able to move through your business.
Think of your business like a pipe with opportunities flowing in one end and revenue flowing out the other side. In that pipe, there are valves that can restrict the amount of “water” flowing. The goal of the Revenue Throughput System is to maximize the revenue coming out by removing anything that limits the flow from one end to the other.
Our #1 goal is to convert opportunities into revenue more often and more efficiently to drive business growth. Why is that?
Because, regardless of what else you want to do with your business, you need revenue to do it. Revenue is the fuel for every other activity in your business. And that’s why we center everything around expanding your “revenue throughput”.
2. Collaboration: Getting Everything to Work Together for Growth
Wouldn’t it be fantastic if picking a goal was enough to get you there? Just shout, “I want revenue growth!” three times and bam! Well, I can at least give you the next best thing–a reliable process to get every part of your business working for your growth.
Many business owners can fall into the trap of thinking growth is just about marketing and sales. What they fail to see (and therefore struggle to implement) is that revenue growth is multi-faceted and needs the collaboration of every part of their business.
The Revenue Throughput System helps you optimize every facet of your business that impacts revenue growth--through decades of working with business owners, we’ve identified 8 critical dimensions that have a direct impact on revenue generation.
Within each of these “revenue-critical” dimensions, we help you optimize your processes, organize your people, and set your benchmarks--so that every part of your business is working together to increase its revenue generation.
3. Feedback: Determining Where Revenue Is Getting Constrained
Unlocking your growth isn't just about "turning on" just one area of your business. It's about turning on every valve on that “revenue pipe” and continually checking that each one is contributing to your maximum revenue output.
The beauty of a revenue system is that it lays out the parts of your business that need to continually checked for output. You need to know why something is or isn’t working, not just if it is. To extract this insight, you need an assessment that goes a bit deeper than a simple pass/fail analysis. That’s why our Revenue Throughput System begins with our proprietary Revenue Throughput Analyzer.
The Revenue Throughput Analyzer provides a deep dive into each of the 8 revenue dimensions I mentioned above. It breaks each dimension down into 6 critical benchmarks to help you pinpoint exactly what isn’t working within, say, your marketing efforts.
That means you don’t have to stay up at night wondering what exactly is holding your growth back. Just walk through the Revenue Throughput Analyzer to uncover the insights you need to get your “revenue system” in tip top shape.
Turning Insight into Action
So you’ve established your goal, you’ve outlined your system benchmarks, and you’ve figured out which areas need work. Now what?
Your next step is to turn problems into solutions, beginning with the areas most urgently in need of attention. The goal here is to transform revenue constraints into contributors.
We help you do that through the Revenue Throughput System by giving you step-by-step guidance and one-on-one support to optimize each of the 8 revenue-critical areas of your business. Our systematic approach ensures that you’ll see revenue growth--because we help you identify revenue constraints and help you remove them for maximum revenue throughput.
But here are the steps to take away if you want to do to consistently drive meaningful business growth:
- Use a trusted, comprehensive system to identify growth constraints.
- Make a plan to transform your constraints into contributors.
- Optimize each benchmark to take you even further.
- Repeat the process for continual growth.
If the Revenue Throughput System made you curious, click here to learn more about it. Everything from process outlines to case studies. I think you’ll like what you find.