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Getting your business to grow is a juggling act. You have to keep income, expenses, cash, and credit all in your sight and under control. If one were to drop, you would risk them all tumbling down. While startup businesses are almost singularly focused on growth, small businesses are the true stars of expansion, having already gotten through the stage of establishing their concept, building a staff, and creating all the necessary work processes. Those that then implement a business growth strategy have an improved chance to separate themselves from the 20 percent of new businesses that will never reach their second anniversary of operation.
In short, growth strategies are strategic frameworks that help enable a business to grow, from overcoming challenges to realizing business expansion. To be clear, a growth strategy is not a marketing plan. It is not a collection of tactics and milestones. It’s a strategy that serves to drive decision-making at the highest level.
What is the best way to pursue controlled business growth management? We have some suggestions.
Growth strategies drive success by getting all departments (and individuals) within your company to focus on the plan to achieve the goals you have set. Whatever your industry or niche, there are several characteristics common to the construction of a solid controlled growth strategy:
As anyone who runs a business knows, it’s easy to lose long-term focus dealing with the distractions of everyday demands. To keep the ship on course, you need to steer it regularly, adjusting your route according to the predetermined destination you have mapped out. That is your plan for growth.
Your growth plan outlines a schedule for the immediate future of your business and how to increase its revenue. Your plan should include:
You must be forthcoming and share all relevant information with your staff. It’s the only way they will fully understand and appreciate the directions they are given.
Imagine all of your employees as members of a crew. You are depending on everyone to row together to reach the intended destination. It’s more than an advantage; it’s a necessity to have them all lined up, facing the same way, knowing their destination, looking ahead to that destination, and then rowing in sync.
Let them in on where you are going and how you expect to get there. Being informed will make them feel more like part of the plan, and they will respond accordingly. Of course, with any confidential information, you let them know what you are sharing is private and that revealing it would threaten the business’s growth.
Cash is king for a reason, so be certain that you understand your cash flow and stay on top of your collections. Aside from increasing revenue, reducing spending is the most effective means of impacting your bottom line and increasing profitability and the probability of success and growth for your business.
There may be no easier element to explain and to get participation than helping to reduce costs. Anyone who has been with your company for any period of time is likely seeing places to reduce spending or eliminate redundancy and waste. If an expense does not help your core business, it is probably not worth spending resources on.
Growth can be its own monster, and if you do not have it under control, it can create more problems than it solves. The best way to be certain you maintain control is to create and follow solid procedures that keep you pointing in the right direction and gaining ground.
While there is a certain amount of cache associated with the modern era for innovators to “move fast and be disruptive,” it is actually more important to leverage the guidelines and processes you have in place that work. Without them, you put your company at risk. Whatever is functioning well enough, leave it be; there’s no need to interfere with it. That said, do not ignore the things you uncover that require fixing. Dedicate appropriate resources to get them in line with your goals, but don’t let them distract you from what’s working and has helped get you to this level of success.
While your business experiences the increased demand resulting from your growth initiatives, you may face a cash flow crisis that causes you to want to rely on credit to fund your growth. Expenses from increased demand for your products or services can easily present a continued cash flow crisis. Consider negotiating alternative payment schedules with your suppliers. Sometimes leasing will be a preferable option to buying.
As the costs of providing those goods and services outpace your ability to process your collections, it would only take a cycle or two of delinquent revenue collections to put your company in a difficult position, unable to keep pace with the desired and hard-earned increased sales.
A recent Small Business Credit Survey conducted by the Federal Reserve showed that while 60 percent of businesses had less than $50,000 in debt, 13 percent had $500,000 or more. While acceptable debt levels vary based on the cash flow your business generates and the number of assets the business owns, it is vital to keep your debt under control. As an alternative to debt financing, make sure to explore the option of equity financing to fund your business growth.
During the first few years of building your business, you were no doubt focused on surviving. Now, it is time to prioritize the growth of your business to increase the chances that your company will succeed and grow fast enough and strong enough to provide for your initial vision of what your company could become. By creating a solid plan that you implement systematically and consistently and focusing your efforts on the future of your company, you will see your business progress and succeed.
Develop a business growth strategy that aligns with your vision, budget, goals, and timeline. Then, the more you closely measure and monitor your efforts, the more you’ll be able to judge what is working well and what isn’t. By continuing to develop your business growth strategy, you’re bound to come out ahead in the end.
On November 21, 2023 North American Kitchen Solutions completed its acquisition of Stainless Specialties, Inc.Read More