Being clear and focused on what is being done, designing and implementing a business strategy, stopping putting out daily fires to look at the medium-term strategy and being aware of the company’s growth stage are the keys to success.
Statistics show that 75% of Spanish companies do not survive their first year. For us, who advise on the development and internationalization of companies, one of the common problems among startups and SMEs is that they lack a clear business and growth strategy because most managers are putting out the day-to-day fires without taking the time to focus and define the company’s future growth strategy.
“When designing a business strategy, it is necessary to be clear about the company’s growth stage because we usually find startups that waste money on branding and marketing actions without having clearly defined the product or service they sell and how it meets the needs of customers,” explains Rajesh Nair, Gedeth’s partner for the Asia-Pacific region. “In a crisis or pandemic situation, it is not necessary to change what we sell, but to refocus the message and put the value on highlighting the product as a necessity and not a luxury,” he adds.
With the experience of having advised more than 1,000 companies in their growth and internationalization strategies, Gedeth is participating as a mentor company in the E-Global Hub, the entrepreneurial space of the Chamber of Madrid and Madrid Activa. And to help entrepreneurs and SMEs to turn their business strategies into successful high-performance companies, the Spanish consulting firm highlights the five most common mistakes to avoid:
- Avoiding clarity, focus and action. Clarity means identifying who you are, what you do, what the customer needs from you and the problem your product or service solves. Focus means focusing on a product and what makes you different in order to market it through the right channel and activity. Finally, action means going to market, experimenting, pivoting, reacting and learning from mistakes to improve, optimize and evolve towards success.
- Not knowing the company’s momentum. Companies are alive and go through different stages of growth and maturity. The usual mistake is to do things that do not correspond to the momentum of the company’s life. Thus, there is a first founding phase in which it is necessary to be clear about what the market demands and how we are going to adapt and sell our product or service to solve certain deficiencies or problems. The second phase is the momentum in which the company must earn the right to grow. And the third stage is the scaling stage, in which the company must continue to innovate and reinvent itself in order to stay ahead.
- Not focusing on the right thing. Most entrepreneurs and SME managers struggle because they think of tactics to save the day and put out the fires that arise daily, and they do not spend time developing business strategies that put the focus and clarity in the long term. A strategy that makes sense in these times of pandemic, if we take into account that between March and December last year more than 68,000 companies have disappeared according to the Social Security.
- Taking things for granted. Growth creates gaps in the company, which means that there will always be problems. In each phase these problems will be different as the company and the team will grow and change as well. The team must be focused on customer satisfaction by constantly analyzing and evaluating the points of improvement of the product or service. In fact, analyzing the impact of the pandemic, the Bank of Spain warned earlier this year that up to 10% of companies are at risk of liquidation.
- Not making decisions. For a business strategy to be effective, it is necessary to say yes and no to certain things. It is not a matter of doing things right or wrong, but of making decisions and focusing on that decision and the future. When looking into the future, it is necessary to make decisions, to do something, and not stand still. Based on real data and customer feedback, decisions must be made to set a strategy that must be flexible, because 99% of the success of a strategy is in the execution, not in the planning.
We can help you define – or re-think – your growth strategy. Contact us for more information.
