It got me thinking about recent conversations with SME and business leaders around being ready for growth so pulling all those insights together here are my top 10 things to consider:
Purpose – Think exactly why you want the growth.
It's your business so it's up to you to decide what you want and need from it. Growth will only work long term if this is considered. There are many different motivations for business growth and it's important to recognise what yours are to make it work for you. Bigger is not necessarily better and growth is not always the answer for everything.
Some common reasons for growth that sometimes cause issues are:
More money – It may not achieve this. Growth can require investment, growth is an unknown quantity and you may possibly be in a market where you can raise prices in certain areas and achieve more money with less sales.
More impact – If it is to gain more market share then your competitors will almost certainly also be thinking this and have growth strategies of their own. Is a greater market share worth it or will a niche market be better for you?
More status – If the reason for growth is because it's expected or to gain status then it is worth thinking about the need to achieve this. A profitable business rather than a large business has a better platform to achieve a longer term sustainable status.
Strategy – Decide exactly which way you will focus your growth strategy:
A common framework for deciding growth strategy is the Ansoff Product/Market mix which shares 4 options:
Market penetration – Selling more of your existing products in existing markets. This would involve greater sales from existing clients, attracting new clients from competitors or persuading non-users to purchase from you. This option is often seen as the easiest one.
Market redevelopment – Expanding into new markets with existing products. This can be geographic new markets or new market segments. This option needs effective and creative marketing.
Product development - Operating in existing markets with different versions of your product. This can be a useful option to tailor products to different segment needs.
Diversification – Expanding into new markets with new products. This is the riskiest of the options.
There is one other consideration this model doesn't cover as it focuses on growth models and that is of withdrawal. A company may choose to withdraw from a market as the possibility of growth doesn't align with their strategy, vision, values or resources.
What growth strategy have you chosen and why?
KSF – Decide what you want to measure as your Key Success Factors (also known as key performance indicators or critical success factors)
KSF are the measures that you decide to use to know whether your strategy has worked or not for your business.
They need to be specific and time framed with full review checks.
Some examples for Key Success Factors are:
- Customer satisfaction scores
- Cost of customer conversion from lead to sale
- Business or department net profit
- % of retained customers
- Growth in new customers
- Number of customer meetings/quotations
- Number of visitors to the website
- Employee engagement
These need to have clear review points and tracking.
How are you and your team currently linking and tracking your daily activities to your growth plans?
The Bottom line – Check you are not at risk of overtrading.
This is where your business is growing sales faster than you can finance them. This usually leads to serious challenges with finances with a lack of working capital to finance operations. It often leads to other issues with quality, customer service and staffing morale too.
You are at significantly higher risk of overtrading if:
- You don't regularly check and understand your accounts
- You don't understand the difference between turnover and profit
- You don't know the profit margins of your products/services
- You have small profit margins
- Your sales teams have no guidance on pricing and discounts
- You have late payers
- You hold high stock levels
How well are you checking your bottom line? What help do you need to reduce your risk?
Mindset – Keep your confidence and passion levels high.
If you don't believe in your business no one else will. Analyse your strengths, recognise your development areas and get help.
Asking for help is a sign of strength not weakness and gaining external help and perspective for your business from sources such as training, mentoring, professional advisors and non-executive directors will add value.
What makes your business great?
What external support do you need?
Staying there – Innovation is a growth business imperative.
If your focus stays on the continual improvement of key areas such as:
- Customer satisfaction
- Customer changes
- Staff engagement
- Operational efficiency
- External trends
What are you going to focus on improving?
Staying sane – Maintaining your own balance is the only sustainable growth model there is!
All the research shows that a mind/body balance is needed for optimum performance.
- Managing your emotions through developing your emotional intelligence
- Managing your working hours as overworking leads to less productivity and more risk of ill health
- Managing your activities as multi-tasking has clearly been proven to increase stress and decrease output
How are you looking after yourself?
Team – Your team needs to be with you along all parts of the growth journey
A happy motivated and engaged team means all your work is aligned.
They need to clearly understand how their work fits into the overall business goals and feel their contribution is valued.
How well can your team explain the business growth plans?
Operations – All parts of your business need to be aligned.
This may sound obvious however in high growth times it is only too easy for this to go wrong. The sales team can be progressing well with new orders and be totally unaware that their good work has caused a 3-week delay in clients receiving their orders and that the production team are at breaking point.
All teams’ resources need to be considered for any growth and the impact of the growth needs to be carefully checked to avoid team conflict and customer dissatisfaction.
Are your teams’ efforts fully aligned?
Collaboration – Joining resources and skills together makes sense
In any growth strategy you are not alone. Your clients, your industry, your suppliers all play a part. By having a collaborative outlook and looking for opportunities to network and help others you will make the most of your business opportunities and enjoyment.
Many people worry about professional networking and in our courses, we focus on the beliefs and attitudes as well as techniques here. The key is to focus on meeting interesting good people, not to focus on sales.
With other stakeholders such as suppliers or even competitors by thinking in a wider way you may be able to join forces for greater benefit.
How can you improve your collaborative networks?
If you have any questions or would like to more on this subject, I would really like to hear from you.