Being successful in business is the outcome of deliberate strategy, and smart decisions. This is true for new start ups and for established companies. These decisions are usually based on facts, like metrics, reports, and financials. However, assumptions, bias, and core beliefs also influence the decision making process. And this can have a negative impact on the outcome. In particular, there are 3 assumptions that limit business growth. Read on to understand what these are, and learn tips for how to avoid them.
- What Customers Think
“Know your customer” is the basis for effectively reaching and engaging the target audience for any business. After all, without knowing what customers care about, how does a company deliver value with their products and services? And most businesses would say that they know what their customers think. However, these are often based on old, outdated information. Or it’s assumed that the feedback from one slice of their customer base applies to everyone.
- Staff Loyalty
Many entrepreneurs have been shocked when key staff leave the company, because they believed them to be happy, loyal employees. This assumption shapes decisions around compensation packages, working conditions, and performance management. And it is dangerous to assume staff loyalty, because then a small business will slack on efforts to engage and retain their employees. Or a business will be unprepared for the sudden departure of a key employee, which can disrupt operations and revenue.
- Pricing Accuracy
Another assumption that limits business growth is thinking that prices are correct. For service businesses, raising rates and fees can feel daunting. But after just a couple of years of avoiding price increases, rates are out of line with overhead. Which means shrinking profit margins – and that limits business growth. Assuming that customers won’t pay more has a huge negative impact.
How to Avoid Assumptions That Limit Business Growth
Stay Informed
Keep sharp with continuous education. Save this list of best books for business owners to access cutting edge ideas and level up your skills as a leader.
Review Data
Regularly analyze reports and key performance metrics. Look for changes and trends. Staying aware of the numbers in your business keeps you connected to facts. Also, set up systems to collect ongoing feedback from customers.
Don’t Take Anything for Granted
A long term customer can move away, change their mind, or no longer require your products and service. Staff prioritise their lifestyle and career ambitions. Don’t take anyone, or anything, for granted. Always put the long term health and success of the business first.
Competitor Analysis
The market is always in transition. Stay updated on what other companies are doing. Regular competitor analysis will keep you informed of strategic developments, product offerings, and pricing shifts. This will keep you aware of opportunities to improve and develop your competitive advantages.
Get Perspective
Gain the perspective of an outsider who can evaluate your business and challenge your assumptions. A business mentor or coach is valuable for guiding your thinking and avoiding blind spots. Not only that, but they can help keep you accountable and on track with hitting your targets and goals.
Conclusion
Assumptions and beliefs shape business decisions, which can lead to negative outcomes. Assumptions can limit business growth by failing to connect with customer needs, neglecting employee engagement and company culture, and restricting revenue and profits. Overall, the best advice is to keep an open mind to new data and information, and look for these opportunities to improve and grow your business.
USA Today 