3 Strategies To Prepare Your Company For Growth Post COVID-19
The COVID-19 pandemic has been devastating for everyone in a variety of ways. In addition to the health challenges posed by this virus, our economy has been hit hard. Millions of people have lost their jobs and thousands of businesses have permanently closed.
Despite the devastation, the road to recovery will include opportunities for entrepreneurs to fill in these new gaps and create lasting value for the reshaped Indian economy.
To do that, however, entrepreneurs must be ready to adapt to change. There is no doubt the status quo has irrevocably changed for almost every Indian, and if you’re a business owner, trying to keep things as-is—especially right now—is a recipe for stagnation and extinction.
We know after every major societal shakeup there are companies that grow, but in those situations, the entrepreneurs at the helm chose to grow their companies. It didn’t happen by accident. So, how can you prepare your company for controlled, sustainable growth?
To answer that question, we lay out three strategies for growth that we think are particularly relevant for entrepreneurs right now. If you’re ready for growth, here’s what you need to know.
A critical mistake in preparing for growth is failing to commit to reinvestment. Rather than pulling out as much profit as possible in the business, plan on reinvesting a significant amount of the profit in the business to grow the business. Reinvestment has many incredible benefits and can be done in different ways, but the key is to commit to a significant reinvestment strategy.
There are many benefits to reinvestment. With a reinvestment strategy, you can:
- Build a war chest for acquiring other companies
- Increase your compensation standards, which helps attract and retain top talent
- Increase your marketing to grow demand for your business
- Make significant investments in technology and operations that will allow you to control more of your operations and lower the cost of operations
As these moves will better position your company to control its future in a market that will see a lot of change. Growing your market share, improving and getting more out of your workforce, and creating new product lines are ways to offset negative change elements that could be in store for your business. Reinvestment allows you to do that and grow.
Anticipation is about looking to the future. It’s about surveying the market and having a vision for where it will go and how your company will fit into that vision. If you’re a visionary entrepreneur, now is your time to shine. It’s anybody’s guess what the future will look like post COVID-19.
What we do know is that your growth strategy can’t be taking your existing financial model and increasing it every year. That didn’t work in the past and it certainly won’t work now given that the way business is done in every industry will be changing.
You have to run through various scenarios of change and ask yourself, “How will my business operate when the fundamentals of doing business as I know them change?”
If you do that, you can put growth strategies in place to leverage your strengths and evolve where needed to continue to grow in the face of the changes coming our way.
The boldest, bravest way to lean into growth and to drive change is by embracing innovation. It’s also proving to be the smartest way to do it.
In 2005, the largest companies in the world were energy and finance conglomerates. Today, the biggest, most valuable companies in the world are all technology companies: Apple, Alphabet (Google), Amazon, Facebook, and Microsoft. The reason? These companies drive change through innovation.
It’s incredible that 20th century incumbent companies can watch iconic peers like GE and more lose to innovative new entrants and still ignore the direct connection between innovation and growth.
It’s willful ignorance, but you don’t have to follow their lead. Whether you are leading a large incumbent or you are starting your first business, know that innovation is now a constant reality of our world. With the ways our world has changed—and will continue to do so—now is the time to make innovation a core competency of your business. You will not only fill in the gaps created by COVID-19, but you’ll optimize your ability to achieve your company’s vision.
Growth Never Stops
As we begin to recover from this global pandemic, what was once true is now more relevant than ever: there is no middle ground. Your business is either going to grow or shrink.
You may be slowly shrinking, but the new Indian Economy will not allow businesses to hold where they are without ambition. Customers expect that the market will fight for their business, that they deserve the best for their money, and that the bar on what “the best” looks like will be raised every year. To continue to beat out your competitors and win customers in this reformed landscape, you must reinvest, anticipate, and innovate, and keep growing. Change is an ever-present constant, which means growth must be a never-ending process.