5 Sure-Fire Ways to Drive Your Business Growth (& One That Can Kill It).
Whether you’re an early stage company or you’ve been around for ten years, growth is something every entrepreneur or small business owner is continually chasing. Not always for the right reasons, but chasing, nonetheless, because it’s the yardstick most businesses use to measure their success.
But, business growth is more than just beating last year’s numbers. Or hitting some arbitrary revenue or profit level because of how long you’ve been in business, or worse, because it’s a nice number to achieve (like $1 million or $5 million).
Business growth should be well thought out; the result of a sound rationale and a plan. But, that said, growth isn’t for everybody. It provides new management challenges in almost every aspect of your company because at its very essence growth requires change and change is difficult to manage.
And it comes at a price. Not just with the potential cash it might require, but in personnel resources, either stretching what you have or requiring an infusion of talent that may or may not fit the culture you’ve so carefully nurtured.
While growth is challenging, given proper consideration and planning, it’s very achievable. However, it requires a commitment to a disciplined process as you embark on that growth.
The process I’m going to describe has been proven over time, with my businesses, with ones that I have turned around and many that I have advised. The process involves 5 sure-fire ways to drive your business growth. They may not be crazy exciting…but they do work!
1. Know “why” – define the rationale for your growth.Defining “why” is critical. Without a solid rationale, all you have is growth for growth’s sake. Growth should either be capitalizing on an opportunity or mitigating a threat. Specifically define, research and size the opportunity. If you’re addressing a threat, potentially competitive, how big is the threat and what are the implications if you don’t?
Without this step, growth is just “building castles in the air.”
2. Know “what/how” – define the specific objectives of your growth.Once you’ve determined why you are planning to grow, you have to define from where that growth will come. There are three vehicles for growth (and multiple combinations of these):
- Expansion of your sales team and your coverage.
- Expansion of your market (either geographically or application).
3. Document and communicate “how/by whom/by when.”There is no growth without a specific plan. Based on what you come up with in the first two sections, develop a plan that documents your particular objectives and the strategies you plan to use to achieve them.
Establish critical tasks, milestones and assign specific responsibilities for each. Whether this is done with the majority of your team or not, you have to not only communicate it to the entire team but get “buy-in,” from all levels of the company. In short, consider your growth plan for what it is…your company’s future!
4. Determine how you will fund it.Growth almost always requires capital, whether to fund development, add new people or products, create new relationships. And this fact is, often, what slows down or even stops a robust growth plan.
Sure, you can grow out of cash flow, but only to a point.Through my experience with businesses I’ve run, turned around or advised, I’ve established some “rules of thumb” for growth. Broadly, for manufacturing businesses you can grow about 25-30% per year out of cash flow. For services businesses, maybe 40-45%.
Growth beyond that requires more capital to fuel the growth engine. You need to determine what your cash requirements are to fund your plan BEFORE you embark on it. You may need to raise capital, either through taking on some debt or bringing in some new investors or partners.
5. Have a mechanism to track it, get feedback and pivot, as necessary.A plan is only as good as your ability to track it, get feedback from the team involved to determine what’s working or not. You should establish periodic review meeting to assess progress, raise issues and do some course correction, as necessary. And, determine if and when you should pivot off your plan to something that might work better.
And finally, you want an equally sure-fire way to kill your business growth? Here’s what to do:
Operate with a strategy “what’s always worked” will get better results.This is part of Einstein’s quote about the definition of insanity taken to small business. And it would surprise you how many small businesses operate on this strategy. “What’s always worked” is comfortable like a pair of old shoes. But, ultimately, old shoes either have to be repaired…or thrown out. Growth requires change to fuel it. Status quo is the enemy of growth.
Business growth, especially, sustained growth provides significant management challenges and requires a disciplined process to achieve it. Hopefully, we’ve provided you the foundation to embark on that growth.
"The Entrepreneur's Yoda" knows these things. He's been there. May success be with you!
How have you managed your growth? Please share your thoughts in your comments. It can help another entrepreneur or small business owner.
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