How to Get Your Business Ready to Grow
If you have plans for growing your business, you should consider it your task to get ready to grow before you actually do it. Business growth always has growing pains and roadblocks. Many of them are predictable and easy to foreshadow. If you know what they are, you can anticipate them in advance. You can also eliminate some of the significant business issues before they happen. In the upcoming paragraphs, I’ll cover some things for you to consider before you grow. For simplicity, we’ll consider the organic growth outlook for your company and leave the acquisition and other growth methods for another time.
Growing Your Customers
If you plan to grow your numbers of customers, you will have several things to think about because growing sales means meeting higher demand by all of your different departments and groups. Growing your numbers of customers also means you will need to increase your marketing, increase your sales efforts and increase your product or service volumes.
Growing Your Marketing
Increasing your marketing, to attract more customers means you will need to set your marketing strategy and then carefully plan and budget all of the marketing campaigns within it. This is likely to take more money, more marketing staff, more production scheduling, more events and above all more measurements of your marketing effectiveness, because you are now putting more marketing money at risk.
This will require higher skills from your marketing director, as activities increase, this director will likely need to hire managers of campaigns (or groups of campaigns), and give them budgets and responsibility for the targets and goals you’ve set. Yes, this means getting good at setting, measuring and achieving goals. Setting goals is the easy part. Measuring your goals may take an information system and achievement will take stronger practices, procedures and raising your staff’s skills.
Growing Your Sales
Your next task will be to increase your sales capacity to handle the anticipated increase in leads from your highly amped marketing goals. This means hiring, training and managing more sales staff in all sales positions. You will need to plan this out by creating a hiring plan, a training plan and a funding plan. All plans should be with the timed to provide gradual sales team additions to meet your growing number of new customers. This will mean hiring procedures and activities, training planning, new employee acclimation, facilities space for each new hire and management absorption of new employees. All of this will need to be budgeted, time phased and matched to the anticipated leads.
Growing Your Operational Capacity
If you choose to increase your capacity for existing product or service volumes, this is a common way to grow.
In the case of products, you will need to determine your total production capacity for meeting sales volumes. If you are unable to meet new sales volumes, you must know this in advance, and you must know the current and future limits of your volumes. Being prepared to exceed this is good, and your solutions are to increase your existing production capacity or to go to outside vendors to augment your existing capacity.
If you need to increase your service volumes, then you must be evaluating hiring new service employees to meet the demand. Be sure to know exactly what workload a service employee can handle, and further, know how many service employees are needed for your anticipated sales. Service employees must be hiring-timed to your new clients arriving and needing service. This makes a time phasing all the more important, as poorly timed hires will leave your customers dissatisfied for many reasons.
Product and service quality will also be a significant issue during growth. You will absolutely need to monitor any decay in quality, and take immediate action should quality suffer. Proactive quality measures can be taken, however, quality issues can arise, even if preplanning is performed.
Growing Your Geography
Should you choose to grow by geography, you have many things to evaluate in advance, so choose this option carefully. Here’s what I mean:
If you expand into another jurisdiction such as another county, or state, that is an option to grow, however, you should know that the positive results of doing this opens you to the increased sales in a new market, but it also opens you to the many downside issues such as being subjected to the regulatory environment of each new jurisdiction. This will add an entirely new layer to your overhead costs of running your business, as you will need to duplicate the regulatory requirements for each jurisdiction. This means duplicate regulatory reports, taxes, licensing and complying with the laws of that new jurisdiction. This means growing into another jurisdiction will cause your administrative costs such as accounting, legal and consulting to go up, as these skilled people will open your company for business in these new areas. Upon entering these jurisdictions, your expenses will be climbing rapidly in the early going as you find your way through the initial filings of getting setup. After setup, this multijurisdictional administrative effort will reduce somewhat after all the setup efforts are complete. Once ongoing, your costs for these same professionals will now be a direct result of the regular filings and reporting required of you. In the future, any efforts you currently perform to satisfy your current jurisdiction may be multiplied to predict your future administrative costs. Don’t mistake this expense as non-existent. It’s actually very expensive. Remember, each new state, every year, requires corporate registrations, sales tax filings, real estate tax filings, annual financial statement filings, income tax returns, internet sales law compliance and more.
Should you decide to grow into another country, this is possible, however, you must first evaluate the many new layers of regulations you are engaging because new costs and research for you to sort out how to do business there will be: international trade laws, tariffs, political instability, warzones, new country taxes, new country laws, and new country compliances of many kinds. This is a highly expensive undertaking that should be explored in operational and financial projections before you conduct business in another country.
Your Administrative Growth
Your company, under any of these growth scenarios, will need to consider software automation. You will need to automate as many transactions as possible. This means all of your transactions with your customers, your vendors, and your employees. Automation will keep your costs of doing business very low. This is an absolute requirement if you are to keep your cost control effective as you grow. Without automation, your costs will escalate with your sales and your profit will not grow, and may perhaps disappear. Many companies have dispensed with proper planning and implementation of good growth procedures only to see their expansion plans stop, reverse, or worse, fail as a company!
Under the umbrella of tasks for growing your company administration, other things will also challenge you. Your management will be challenged to acquire new skills in managing people and projects, as more people and projects will demand new structures and techniques of management. Also, management will need to adapt to new ways of gathering company information to determine improvements needed in company. Over time, the processes, procedures and staff will need to be revamped to handle the growth, as old ways of doing business will, one by one, become outdated and will demand process reengineering.
Growing your company can be exciting and rewarding. Always conduct advance exploration of your operational and financial projections for any growth plans. Be sure to be ready for growth with far fewer surprises.
Here are the key areas to monitor:
When Growing Your Customers
- Always plan and forecast
- Doing this will require you to grow in all other departments in a synchronized way
When Growing Your Marketing
- Expect the need for greater marketing skills
- More projects and more campaigns will happen
- Have clear goals and measure your results against your goals
When Growing Your Sales
- This will mostly be people you are adding
- Add at a rate that meets your marketing plan results
- Get good at hiring, training and managing
- You will also add facilities and equipment
When Growing Your Products and Services
- This is all about capacity
- Know your limits
- Find alternatives to lift your limits
- Monitor product quality carefully and adjust your quality quickly
When Growing Your Geography
- This is the most expensive of growth paths
- Each new jurisdiction you enter has high costs
- Entering a new country has high costs and great complexity
- Always preplan your entry with an operational plan, forecasts and ProFormas
When Growing Your Administrative Structures
- Leverage software wherever possible to lower costs and increase productivity
- Management skills will be challenged – stay on top of what you need
- Pay attention to gathering the information you need. How you gather it will change
- Pay attention to processes and procedures needing updating as they will break