Of course you want to grow, but business owners can get so caught up in the day-to-day they lose track of what this really means to them and how they’re going to achieve it. Here are some great tips to help you refocus.
Everyone wants to grow their business, don’t they? But, what do we mean when we talk about growth? Many businesses focus on growing their sales, revenue or turnover. These are the big numbers that sound impressive and make us feel good. While it’s important to monitor these trends, we also need to focus on profit growth over the long term.
Other ways we might measure growth include the size of our business in terms of employees, branches or client numbers. Geographic reach, market share and product range may also be measures of growth. To determine which of these measures is most meaningful, it’s important to consider these factors in light of your overall business strategy. Your goals need to be clearly defined in order to be monitored over time. Instead of a vague idea that you want to ‘grow your business’ a statement such as ‘we want to double our number of outlets over the next three years’ would be more useful.
It’s also important to remember that growth in physical factors such as outlets and staff doesn’t necessarily translate into profit growth. Most approaches to growth also incur a growth in costs. Excessively rapid growth can impact on cashflow, especially if that growth is funded by debt. So, these aspects need to be balanced, to ensure steady growth that is sustainable in the long term.
Pruning for growth
Just as a gardener prunes their roses in the winter to ensure strong growth in the spring, you need to regularly prune back certain aspects of your business to ensure it will flourish. It’s easy to become caught up in the day-to-day tasks of your business and forget to stand back and focus on what’s really important.
- Do you have sluggish processes that you could make more efficient?
- Do you have one or two excellent products or services that aren’t reaching their full potential?
- Do you have ineffective strategies or unprofitable products that you could eliminate altogether?
The great growth potential in your business may lie with a product that is currently underperforming. At the same time you may be spending a lot of time and effort on something that produces little return and has limited potential to contribute to the overall success of your business.
It’s essential to regularly review your offering of products and services, your systems and processes, the way you interact with customers and the way you recruit and retain staff. As your competitive environment changes rapidly, all of these aspects of your business need to be revised. This ongoing review process helps you to identify potential growth areas so that you can direct your resources appropriately.
Every business has slack in some areas. This may vary seasonally or even on a day-to-day basis if you have certain times that are busier than others. At times when you have excess capacity, think about redirecting your resources to assist with growth opportunities.
Systems and processes
To provide capacity for growth your systems and processes need to be scalable. The pruning principle also applies here. Only use those systems and processes that improve efficiency and effectiveness in your business. Any system you use should help you to do things more quickly, more cheaply or in a better way. Don’t fall into the trap of using systems for systems’ sake – they need to be useful and add value to what you do.
To scale your business it’s important that systems and process are simple and well defined. They also need to be documented in some way. If your plans for growth involve handing work over to other people, you will need to have documented processes so that you can deliver your products and services in a consistent way. You can’t grow your business if all the knowhow is in your head.
Rather than just tacking a new process onto your existing systems, ensure that any new process integrates well with what you already do.
- Do you really need a new process, or could you adapt an existing one?
- When adding this process, is there an outdated process that could be eliminated?
- How will you ensure compliance with the new process?
There is no use having the world’s best systems if no one uses them. Staff training and ongoing review, including customer feedback, are important to ensure the smooth running of your business.
As a business owner, you need to think of every dollar you spend in your business as an investment. You have a myriad of options when it comes to investing in the future of your business. Money is hard to earn, but easy to spend. Don’t fritter it away on those things that won’t contribute to growth. To fuel sustainable growth it’s important to invest in those areas that improve capacity, such as staff training, professional development and customer relationships. These aspects require ongoing attention and nurturing as the results are not always immediately evident. Don’t be tempted to cut back on these developmental activities, they will pay off in the long-term.
Investing in your people is essential to lasting, sustainable growth. Ensure you attract the best people by creating a workplace and a team that is vibrant. Be a business that the best people want to work for. Don’t see staff development as an inconvenience or an unnecessary expense. Instead, see it as an investment in your future and a key way to retain your best people.
Investing in customer relationships is also essential to the growth of your business. Depending on the nature of your business, this activity will take different forms. Whether it’s being involved in industry groups, attending conferences and events or engaging in social media, the investment you make in nurturing relationships with existing and future customers will bring long-term benefits. Neglecting these is an easy way to stunt your business growth.
While investing in areas that encourage growth, don’t spend frivolously on those things that don’t contribute to long-term success. Seek savings on commodity items, where the brand or image is not so important to you. These may include stationery, fuel and phone services. Of course, how you define these depends on what business you are in. If you are a purveyor of high quality pens, then your stationery should reflect that image, but for everyday photocopying and printing in the office, an economical paper is appropriate.
As a business owner, you’ll often be bombarded by service providers and product salespeople with the latest great thing to help your business. Be wary of what you spend your money on and always consider how your investment fits with your overall business strategy. Again, regular review is essential. Is that membership or subscription really of value, or could you invest that money more effectively elsewhere? When you’re facing important decisions where the choices are complex, do your research and seek good advice to ensure the best outcomes.
When looking ahead, think carefully about what you mean by growth and what you choose to measure. Eliminate unnecessary and unwieldy processes and focus on your high performing products and services. If you’re serious about growing your business, you need to invest wisely and maintain a long-term focus. Concentrate on growth strategies that are sustainable, rather than seeking short term gains at the expense of your future.
–Dr Monique Beedles helps design businesses for the future through her consultancy Teak Yew.