Many business owners, CEOs and entrepreneurs say that they want to increase revenues and profits, but how ready are their organizations really?
Growing anything requires much more than making a wish; it requires a multifaceted plan. Resources need to be allocated to fund the increase in expenditures that growing a concern requires.
Consider these thoughts before you decide to increase the sales and client base of any organization.
To grow requires a change in mindset to an external focus. Basic systems have to be in place and working well. Many companies cannot make the shift from an internal focus to an external one because their systems can’t support more clients, production, or delivery.
Companies struggling to handle their current capacity will only disappoint both old and new clients if the organization isn’t functioning well.
Employees view more clients as more work. Savvy ones understand that growth means security and opportunities, but not every employee has that forward-thinking perspective.
Using an analogy of a garden hose, once you decide to put more volume through the hose, all leaks better be plugged and kinks straightened out. And the radius of the hose has to be sufficient to handle the increased flow.
Unless and until this is done, all you’ll generate is a considerable amount of frustration. Picture a hose with the faucet opened as far as it can go, with kinks blocking the flow and leaks spraying and showering water where it isn’t wanted. At the end of the hose, all that trickles out is an insufficient flow.
The company’s business model needs to support growth. This might mean changing from what is “usual and customary” to something dramatically different. For example, a company that is used to doing work for clients, invoicing them and waiting for payment of 60, 90, or 120 days might change to enforcing a policy of requiring clients to provide a sizable deposit before starting any work.
You may need to go after a different kind of client base. Before deciding and committing to grow, you must identify your ideal client. Until you take this crucial step, you’ll waste valuable resources as the organization may do business with just any prospect. The problem is that just any prospect may not be able to afford what is being sold, may not be credit worthy, and may over commit to purchases it does not need or cannot handle.
Part of growing is understanding and accepting the best methods for marketing to new clients. Without a research-based plan, it simply becomes guesswork, which can be costly to implement, with no guarantee of a positive return on investment on the expenditure.
Set specific goals at critical junctures in the sales and marketing process. It isn’t enough to say “We need more clients. We need more revenue.”
Establish and monitor goals that are SMART (specific, measurable, actionable, realistic and time-bound).
Having a system of accountability is important, if for no other reason than to keep the revenue growth plan on the path of success. At any point the progress can be measured in relation to actions and resources expended, providing clues as to what’s working and more importantly, what hasn’t, isn’t and won’t.
Last, does the organization have the right people in place to execute the programs that will generate growth? I’m not just referring to those held accountable for selling. Every department or function in a company is touched when delivering a good or service to a client.
Are these individuals trained and ready for the complexities that growth brings?
Growing an organization is exciting and rewarding; just make certain that a realistic plan is in place before starting the process and monitor progress regularly. The old adage of “an ounce of prevention beats a pound of cure” is particularly true when it comes to growth.
Ken Keller is an executive coach who works with small and midsize B2B company owners, CEOs and entrepreneurs. He facilitates formal top executive peer groups for business expansion, including revenue growth, improved internal efficiencies, and greater profitability. Please contact him at Ken.Keller@StrategicAdvisoryBoards.com. Keller’s column reflects his own views and not necessarily those of The Signal.