Many are the business owners, CEOs and entrepreneurs who say their main focus is on growth. They want to increase revenues and profits and expand their client base, and they want to do it now.
But are they really ready to handle all that comes with growth? I see six significant challenges that any business seeking to grow must face.
Growing requires more than desire; it requires a serious commitment backed by energy, focus and staying power.
1. Hope is not enough. Hope is never a strategy, and this is the first challenge. It’s incumbent on the leader to have a comprehensive growth plan and build a team that can execute that plan with the resources available. This must happen within a framework of formal accountability, with clear milestones and deadlines.
2. Look out, not in. Committing to growth requires a new mindset that looks outward and focuses on external prospects and clients, not inward toward operational issues.
This change in mindset is easier for some leaders than others. It helps to spend time out in the field, watching the competition with an eye for opportunities that exist for revenue growth, expanding the client base and increasing profits.
Not all leaders have this orientation. A fair number of individuals running companies focus internally and spend too much time, in my opinion, micromanaging their people and company processes.
In a small company, the owner should be on top of day-to-day operations, making sure that clients are served well. In larger firms, a management team is hired and exists to perform operational duties. But to do this well, these individuals need both the responsibility and the authority to carry out their duties.
The true measure of a business is how long and well it will operate when the owner isn’t around. An owner who is in charge of everything acts as a brake on their company’s growth
3. Bring your team along. The third challenge is getting your employees on board with growth. My experience is that in privately held companies, employees are kept in the dark about the company’s plans or financial results. Lacking information to really make the company better, the concern of every employee I’ve met is getting a paycheck and doing what it takes to increase the size of that paycheck.
As excited as the leader may be about bringing in additional profitable revenue, growth adds to employees’ workloads. The challenge for every leader is how to motivate employees who see growth as simply requiring more work without additional financial rewards.
4. Get your systems right. The fourth challenge is that basic business systems have to be in place and working well. Many companies fail to grow because their systems can’t handle more clients, production, or service delivery.
The leader who thinks only about the journey and wonderful destination but neglects the condition of the vehicle (the company) will be disappointed.
Hit the gas without a well-tuned engine, and acceleration will lag. Drive on an empty tank and face the consequences. Drive on uninflated tires, and your mileage will suffer. You get the idea.
5. Adapt your model. Your company’s business model may need to change to support growth. This might mean changing from what is “usual and customary” to something dramatically different. For example, an organization that is used to doing work for clients, invoicing them and waiting for payment of 60, 90, or 120 days might require a change to enforcing a policy of requiring clients to pay a sizable up-front deposit. This might mean seeking a different client base.
6. Cultivate hunters and farmers. Make sure you’ve got the right people to execute marketing and sales programs that will find new clients, and generate more business from existing clients.
Business development, also known as prospecting, takes a certain type of personality. Rainmakers (hunters) are hard to find and hard to keep. These individuals seek excitement and want to always be going after new business.
Account managers (farmers) are easier to find and are good when a company is interested in keeping what it has.
In a go-go economy, hiring hunters will be challenging. Expect a farmer to turn into a hunter, and you will be disappointed.
The ultimate question: How ready are you to grow your company? It’s a lot of work; are you, your people and your company up to the challenge?
Ken Keller is a syndicated business columnist focused on the leadership needs of small and midsize closely held companies. Contact him at [email protected]. Keller’s column reflects his own views and not necessarily those of this media outlet.