This year I have focused on starting a business in 2021 and it’s been a great exercise for me, as I have had to look back on my own entrepreneurial career and face those mistakes and challenges, I have made and encountered. It makes me want to kick myself sometimes for missing the obvious.
When you are in the thick of the action, married to your business, or treating it as your “baby,” it’s easy to do so…but when I look back at some of the most exciting periods in my business life, it was when I entered a business growth phase – nothing gave me greater pleasure than growing my revenues and margins, while taking market share from my competitors, some who were some seriously big concerns.
There’s a lot to cover when it comes to growing a business and I am going to cover it in two articles, so let’s get into the first part.
There are hundreds of strategies for business growth and it’s easy to get caught up in social media and be tempted by the latest “growth accelerator programs” and the numerous coaches, consultants, and mentors like me, who promise you riches for a nice fat fee!
Beware of Promises
The business coaching market has exploded in recent years and so many people are jumping on the bandwagon, looking to profit from selling their knowledge, which is a good thing if the knowledge is good, but there are others who are simply regurgitating information that is already out there and charging huge fees for doing so, which is not so good.
Be careful who you take advice from and thoroughly review any online programs before purchasing and remember that the coaching market is extremely lucrative because there are so many people desperate for business success, or to start a business using their life savings or redundancy package.
They are easy prey
Good courses and coaches do not over-hype their services or programs and will offer affordable products and a fee structure that is tailored to you.
Every business should have a coach, mentor or advisor to help them grow and in my early career, I had to beg, steal or borrow advice until I could afford one…which became several over the years – they can give you clarity when you are wrapped up in thought, see things from an unbiased perspective, because it is not their business and they will help you solve those tough, challenging problems that keep you awake at night.
But be careful who you work with.
Build A Solid Foundation
You must have a solid platform for business growth and think of the structure of a pyramid, where each added layer of infrastructure is supported by the base.
I have seen so many companies grow too fast and suddenly crumble into oblivion because there was no foundation – be it financial or simply not enough of a support structure to service the growth which is a key issue.
I am currently working with two companies on both sides of the Atlantic who are running completely different business models – one is a traditional business in the sense that it requires traditional face-to-face selling, invoicing, and collection, with the other being a fully online concern that receives payment up front.
Both businesses have ambitious growth plans which are totally achievable, and I have worked with the traditional business since the start. It was a pure, cold startup with zero billing nearly a year ago and that now has positive cashflow and profits. The advantage of working from scratch, is that you can build the right processes and procedures from the beginning and although sometimes it is a challenge to get the CEO to follow them, it does at least provide the basis of a solid foundation.
The online business has grown fast over the last few years and although because they have largely “felt” their way through the growth process so far, it is now a matter of making sure they are ready for the real and serious growth plan they are about to embark on.
This means several processes and business functions need to be undone and re-worked, but the result will be the same – to ensure there is a solid platform to work from.
It’s also ironic that both companies are looking to expand across the Atlantic as part of their growth plans!
Create A Growth Plan
You absolutely must create a plan for business growth and that means you are able to support that growth financially and deliver against the increased revenue that you will generate.
If you fail to deliver then you are putting your reputation at risk, which brings me to another key point – you must look at the risk factors to your business, which you should have already addressed and that will certainly increase as you grow.
Growing a business is relatively easy, at least in theory.
You need to increase sales, maintain profit margins (as best as you can), and make sure your cashflow stays positive and I will look at these aspects and outline some strategies in the next article.
But you must keep an eye on the risk factors which given the world economic situation now, are many.
Take a hard look at your finances and decide how you are going to fund that growth – will you need to employ more people and how many, will you need to carry more stock and how much, are you looking to expand overseas and are you familiar with the legal and compliance issues?
And so on.
These are the obvious ones, and you can go deeper into your competition for example and my advice here is to simply be cautious but not negative – if you are running a healthy business right now and you want to grow, but you need to re-mortgage your house to do it, what is the risk/reward payoff?
Only you can decide!
A business growth plan is one that will address each business function and component, with the goal of optimizing them for growth.
It is far better to do this before you do as I did and simply focus on increasing sales as much as possible, without thinking about the infrastructure I needed to support it.
It was a very costly exercise and although I increased sales and profits, I had to spend a small fortune to rebuild the operational systems and hire the right people to support it.
Next month I will detail some specific growth strategies that you can apply to any business.