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The 60:30:10 Rule to Business Growth

A4G have been lucky enough to work with many successful businesses who started out as one entrepreneur with an idea and a huge amount of ambition. But some have achieved what most owner-managers don’t - year in, year out consistent or exceptionally fast growth. 

Many marketing strategies and sales techniques will tell owner managers that it’s that drive that will lead to phenomenal growth. But in our experience that this is only a small part of the story.

We believe that to achieve growth you do not need to create new success stories, but rather tackle the things that are blocking your business from growing – what we call the limiting factors.

And every business owner we have worked with who has achieved consistent year on year growth employs what I call the 60:30:10 rule (even if they didn’t realise it themselves) to deal with these limiting factors.

There are a few standard factors in addition to sales and marketing issues, any of the following list could be what is stopping you from growing right now:

  • Availability of cash to funds fixed assets and working capital
  • Range of products and services
  • Quality of products, services or staff
  • Number of staff
  • Management time
  • Size of premises
Business Growth

This is not an exhaustive list as potential issues can come from anywhere, but many businesses often fail to realise that what has helped them grow in the past, will not continue to work as they aim to get bigger, in this instance many proven policies can end up blocking the company’s chance to grow.

The 60:30:10 approach involves identifying the immediate issue stopping your business from growing. Many successful owner-managers are good at identifying what this is and putting all their strategic time into addressing that issue.

Although focussing on the immediate problems works it is usually a bit stop-start. A challenge is overcome but another one is immediately faced. The 60:30:10 rule involves spending 60% of your strategic time on the most pressing limiting factor, 30% of your time on the factor which will become the most pressing and 10% on the one after that.

One case study we have worked on involved a business where the main shareholder’s time appeared to be the number one limiting factor. To resolve this, a major reorganisation of other management roles was required in order to make senior members of the team responsible for particular aspects of the business. But doing so would simply create too much work for those managers to cope with.

They needed more staff but there simply wasn’t the space.

So premises became the 60% issue and while they were being sought and negotiated on, a significant recruitment programme was underway (30%). Meanwhile, the management roles and responsibilities were being documented ready for the planned expansion.

By the time premises were available, interviews were mostly underway and one or two new employees were working their notices from old jobs.

Sometimes the 60% needs to be focussed on something that doesn’t seem huge but is the issue that holds back everything else. 

A4G have helped many owner-managers to overcome whatever obstacles their business faces sometimes using funding via the Government Growth Accelerator programme. Call one of our Principal Advisers for a free consultation on what we can do for you.