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Ramping Up

Updated on February 12, 2012
Inventurist profile image

Ed has been an entrepreneur and business owner/start-up generator for 15 years. He has also been a shotgun coach!

The "On Ramp" can have potholes!

Planning for Growth is First Step to Achieve It!

Without Planning for Growth You are Anticipating Failure

Taking on the ambitious task of any business can be daunting. Taking on a business where there is no plan for growth is a recipe for failure. All businesses have cycles of growth. Identifying where your business is within this cycle is very important. Depending on what industry you are involved in may identify also what is to be expected with previously successful companies providing some window into the future.

All businesses start out as small businesses. Some successful businesses remain small businesses with regard to some aspect of measurement however with other measures may be exceptional. It isn't the structure of the company that determines the need for planning, it is the future (not end) goals of the company that determine what is required.

The velocity of growth may be shocking in some instances. For those who can adapt and recognize the opportunity, and keep perspective and control, they have a great chance of success. Think about AOL, Apple, Facebook, Yahoo, Google, and many other now generally familiar technology products that you have seen go from a thought to something everyone wants, uses or has used across the country or world. Some of these products literally started out in a person's garage or basement. Guidance and a little planning and they began to ramp up. Then the rockets kicked in and the velocity outstripped the planning for a few of the early technology companies. They found some of the potholes that were avoided to some degree by the later companies in the same or similar industry.

Not Your Basic Business Plan

I've written dozens of business plans along with financials that are intended to do three basic things. One is to be able to specifically identify the where, why, who, how and when to be sure there is a benefit and a reasonable path to success. A second purpose would be to anticipate and secure adequate financing to be able to go forward with the business. This may be required by a bank or other lender before proceeding. A third reason for developing that cumbersome, time consuming, pain in the patoot business plan is to see what it will take to be profitable and what that timeline might look like.

What isn't in the standard business plan, because it is usually rejected by a bank or other lender, is the prospect of that growth curve going from a steady, measurable, and reasonable rise over time - to a meteoric flash upward. I usually write in a best case, most probable and worst case scenario as I develop a business plan. What is rarely acceptable is to show how if something, in today's terms, "goes viral." If you come up with a new app for an iPhone or iPad for example, it may be the biggest hit in the world this week. If it requires no additional production cost or work on your part, fine. But if you are required to provide some sort of support, are you prepared if this product goes viral?

I just went on ELANCE.com asking for an app designer to assist me with a couple of new ideas I have. I am not app design competent so reaching out to those who are is a reasonable plan. This helps me too as I continue with my business plan in that I can contain my costs to what my Elance provider contracts with me to provide this app complete. Now I will know my cost upfront for product development. Then can determine what my future costs should be for maintenance, billing, and any other materials I may provide as a part of the app.

So what happens when I begin to market this great new app and all the sudden it catches on? I have people downloading it all around the world and in a matter of days I go from selling 200 to selling 200,000. Then it turns out there is a glitch in the design that needs to be repaired. Did I capture enough information from everyone who wanted to download it to do an update patch? Can a patch easily fix the glitch? Am I going to now be faced with refunding much of what I had captured as payments? Did I plan for a doomsday scenario?

Planning for Success Includes Failure

My wife is one of the best idea testers in the world. If I can get her to listen to one more idea - now that she has listened to them for over 32 years - she can provide some of the most pessimistic yet accurate observations that I as the eternal optimist rarely can capture. Using her for a sounding board, I can often shave some worry off of the future by planning for the potential of a crash due to something I normally would not have anticipated. When you plan your business you try to identify exactly what you see as potential barriers for growth. You may allow some money for quality control and for testing. Not allowing a large enough amount of money for refunds, fixes, repairs, warranty costs, and the supportive products that go with that are tantamount to total failure.

Fortunately there is a history now for app production and failure. Modeling from what has happened with other successful products helps to guide good leaders to identify percentages of costs associated with potential failures. If the app goes viral, those percentages may actually be logarithmic in proportion and can make the whole thing implode. But because we now have this historical prospective of certain very successful apps, we can see how something might grow, have a meteoric rise then find its peak and become more of a "normal curve" for the future looking for its natural next improvement leading to the next more calibrated rise.

I know this can be applied to organizations as well. I am familiar with one organization that 10 years ago was being funded by the industry they serve. They were to try to improve the number of kids involved in a certain group of sports, initially offering scholarships and other financial incentives as much for the publicity as for the incentive to do well. The organization grew much faster than anyone anticipated and by the third year they had pared DOWN the number and size of the scholarships! They cut back on incentives to participate as well. Then end-fighting and the lack of communications to some degree lead to a split dividing the group by several fractions. How can this ever come back together?

Planning is the key. Setting down and seeing what happened historically first, then seeing what should have happened had everything worked perfectly well. Then planning for even more success the next time gaining the proper buy-in by the the parties prior to execution will allow the resurgence of the organization. Then keeping a constant finger on the pulse with communication among those driving the growth to stave off dissatisfaction and discontent by action will allow the group to return to a stable growth plan. Leadership is key to this kind of accomplishment. No, I'm not talking about the Republican party! But please - do get informed and VOTE.

The Adventurist

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