Growth is one of the most crucial factors entrepreneurs face throughout the life cycle of their business. Many business owners experience stagnation and turn to the securing of capital as a remedy. However the lack of cash is not the cause of their stagnation but simply one of the symptoms.
Do you find yourself constantly reacting to cash flow shortages? Does your productivity always require an increased effort in order to grow?
Sustainable growth depends upon a scalable business structure and operation that will continuously improve profit while avoiding costs and input increase.
Plan your growth
As a business expands its footprint, more and more opportunities present themselves but they are not necessarily the right ones for any given time. Also entrepreneurs are creative people by nature. Every day, before noon, they have probably come up with dozen of ideas for a new service or product. This kind of constant demand and creativity can distract them from their bread-and-butter business. The solution? Planning!
Business planning is a comprehensive process for determining a business future and how it can best achieve its goals. It audits the full potential of a business and explicitly articulates the business’ objectives, the actions and resources required to achieve them.
Desired outcomes come from intentional vision, intentional actions and intentional planning.
Making a few key adjustments can improve the scalability of a company. Reviewing business processes is a good way to ‘trim the fat’ by reducing unnecessary redundancies and increasing efficiency. The employees executing these tasks may provide interesting insights to improve the current processes.
In a business providing services the key may be to find a value-added way to generate supplemental revenue without adding any labor hours.
Invest in technology
Highly scalable businesses grow exponentially. They are not weighed down by the stiff sales/cost ratios of linear models. They manage to increase their sales without increasing costs. It may sound easier for technology companies than for service businesses. However, in this day and age, there is no longer any low-tech industry, only low tech companies.
Even though not every business is designed for exponential scalability, supplementing your processes with software will minimize costs as it grows. For example, instead of relying solely on human capital to handle scheduling or data entry, you may want to invest in integrated systems and automation.
Author: Carine Dieudé, Partner, Director of Strategy, specializes in growth strategies, systems and operations, for small and medium size businesses.
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