Take A Long Term Approach

As an entrepreneur you probably want the ultimate growth for your venture. There is nothing wrong with that idea as any entrepreneur always wants that for their businesses, but you should keep in mind the “long-term approach” for the growth of your business. The last thing you want is for your business to be caught in the middle of a short S-Curve. There are a lot of retail franchises that have been impacted greatly by short term growth, for example, Krispy Kreme Doughnuts. They had a short term rapid growth and now most locations are not doing well at all. Most people were fascinated with their concept of making doughnuts with a machine and how the warm original glazed doughnut tastes, but now people are thinking twice before their trip to Krispy Kreme. Although they still provide great service and product that people want, customers have other options that they resort to due to other factors such as pricing. Krispy Kreme Doughnuts has one big competitor, which is Dunkin’ Donuts. The average doughnut from Krispy Kreme is smaller than the average doughnut from Dunkin’ Donuts. This is also a way Dunkin’ capitalizes on Krispy Kreme customers.

Starbucks is also an example of another short S-Curve, they had quick growth, but then ended up closing 600 or so stores. It was more beneficial for them to close them and even take a loss, than to keep them open and lose more in the long run. The costs are simply more than cash flow in an S-Curve.

How would this affect your business? Even though you may have a unique product or service, sometimes it is easier to promote in the beginning, but if you don’t have a real advantage over the competition, chances are that they will end up capitalizing on your customers in the long run and “steal” your customer base. You want to make sure that even if you are delivering something with an “edge” that your product or service is truly “better” or people will just end up not using it. Remember that short term growth is always great, if the growth sustains in the long run.