You Can't Grow Your Business by Shrinking
Posted on Jul 23, 2009 by Valerie Touchstone
I recently read this blog post by Seth Godin regarding how the idea that you can’t grow your business by shrinking – he really hit the mark with his notation of Tom Peters’ quote “You can’t shrink your way to greatness.” It is, however, a natural instinct for small businesses to hunker down and wait out the storm…when in reality the landscape will be changed when the storm passes. And, if the business hasn’t retooled during the storm, the odds are great the business will either shrink permanently or altogether wither and die. Retooling can include repackaging existing services, researching new markets, exploring potential new products or services, thinking of new uses for existing products, reaching out to former/existing clients and more. The point is to not just sit there! I really loved the smelly fish analogy….it delivers such a strong mental image that motivation to change should be compelling. No one wants to purchase anything from a "smelly fish store!’ Check out Seth’s article for yourself.
http://sethgodin.typepad.com/seths_blog/2009/07/death-spiral.html
Death spiral!
You’ve probably seen it. The fish monger sees a decline in business, so they have less money to spend on upkeep and inventory, so they keep the fish a bit longer and don’t clean up as often, so of course, business declines and then they have even less money… Eventually, you have an empty, smelly fish store that’s out of business.
The doctor has fewer patients so he doesn’t invest as much in training or staff and so some other patients choose to leave which means that there are even fewer patients…
The newspaper has fewer advertisers, so they can’t invest as much in running stories, so people stop reading it, which means advertisers have less reason to advertise which leaves less money for stories…
As Tom Peters says, “You can’t shrink your way to greatness,” and yet that’s what so many dying businesses try to do. They hunker down and wait for things to get better, but they don’t. This isn’t a dip, it’s a cul de sac. It’s over.
Right this minute, you still have some cash, some customers, some momentum… Instead of squandering it in a long, slow, death spiral, do something else. Buy a new platform. Move. Find new products for the customers that still trust you.
Change is a bear, but it’s better than death.
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Tagged: business growth, new customers, advertising, promotion, business, marketing
