Every so-called entrepreneurship guru out there will tell you that you need to grow your business – and keep on growing it. In my experience, however, most businesses that grow without adequate preparation end up as a sad statistic.
Before your business can grow, ask yourself these questions:
Am I a growth entrepreneur or a lifestyle entrepreneur?
Am I growing my business because of my ego or has a real, profitable growth opportunity presented itself?
Am I prepared for the personal sacrifices that growth demands?
Business growth is not possible without people, processes and capital; all three must be pre-planned, nurtured and applied according your business’s growth rate.
If you are satisfied that growing is the way to go, there are six things you should build out before starting your journey of growth.
1. Build processes
It’s essential for a growing business to have the necessary processes in place to support its growth. You should start off by documenting all replicable processes and ensuring that your current – and future – staff are fully trained on them.
2. Build controls
As your business grows so will more and more of its processes, and these will have to be delegated to other, less experienced staff. What controls should you put in place to ensure processes are being accurately followed? For example, is your marketing department spending according to the agreed-upon budget? Are your tellers scanning every single item at the checkouts? I have seen many growing businesses descend into chaos and haemorrhage cash, efficiency and staff because they didn’t have the necessary controls in place.
3. Build the brand
I strongly feel that small businesses should focus their limited marketing spend on direct sales and call-to-action activities. However, as your business grows, so does the need to build your brand because it supports client acquisition and retention, staff acquisition and retention, and much more. Building a brand is a slow, methodical and deliberate process.
4. Build the USP
A growing business attracts a growing number of competitors. It’s been my experience that very few small businesses have a real unique selling proposition (USP) that can translate further than a small geography or element of the market. Entrepreneurs who have a growth mindset need to spend a disproportionate amount of time honing, evolving and innovating the USPs of their businesses.
5. Build management capacity
With the growth of your business comes the need for management. Small businesses usually tap into existing staff as their first source of managers. This is mainly owing to a sense of loyalty and because existing staff have experience in how the business runs. Often, however, these individuals don’t have the requisite managerial experience to handle the growth of the business. For this reason, it’s imperative to have a dual approach to building management capacity. The first approach is building the management skills of existing staff who have the potential to grow. The second is bringing in new external management. That said, I now prefer looking for leadership skills rather than management skills when building my management capacity. In my experience, those who possess leadership skills enjoy far more success in growing a business.
6. Build relationships with potential financers
Growth requires capital. If the growth rate of your business exceeds the capital generated by your profits, financing options are not negotiable. Don’t wait until the last minute to source finance options. You should identify potential sources of finance when you make the decision to grow. During good times, you should increase your overdraft facilities, build your relationship with your bank manager and set out to find financiers such as venture capitalists, angel funders and the like within your personal and business networks. When the day arrives that you need finance, you won’t panic and feel desperate and – as a result of this pre-planning – you will be able to choose the best and cheapest finance option for your growth.
Business growth is not possible without people, processes and capital; all three must be pre-planned, nurtured and applied according your business’s growth rate. Prepare today to become one of the shining entrepreneurial success stories that will inspire other small businesses tomorrow.