There’s an old saying in business that if you are not growing, you’re dying. Some businesses grow to a certain level and stop growing further. The owner may get comfortable at a certain volume and call it good. He or she may believe that they have a good customer base and are making good money, so why grow any further. The problem is what happens if they lose one of their good customers? Suddenly, they are shrinking and, once that trend is started, it is difficult to turn around. So, to be successful over the long term, you need to be on a constant quest for growth.
Many businesses that want to grow will reach plateaus and have difficulty breaking through to the next level. This is very common in the growth cycle. There may be a number of reasons for this, but the three main barriers for business growth are lack of an effective strategy, lack of funding and lack of necessary staff.
Create a Strategy for Success
First, you need to develop a strategy to take your business to the next level. The strategies you employed to get you to your current level will not take you to the next level. So, you may need to consider how you are marketing your products. Do you need to expand your region? Do you need to work on gaining market share? Develop and employ new strategies to address these questions. You may also need to look at your offering and add products and services. The point is to regularly review your strategy and modify it to continue to adjust to address needs in your market, so your business will continue to grow.
Manage Your Cash Flow Efficiently
Next, many businesses cannot grow because they lack the money to fund the growth. It all starts with cash flow. There are only three ways to generate cash flow: profits, borrowing, or adding investors. Profitability is the only organic way to generate cash in a business. Maximize your profits to maximize your cash flow. As you grow, build a cash balance in the business to use in funding future growth. If you have an immediate need for capital to fund growth, use bank financing to invest in equipment. Banks that see a history of profitability and cash flow are more than happy to lend to fund additional growth. Resist the temptation to distribute all the cash out of the business because you will need it to fund your growth.
Build Your Team
Finally, have competent staff in place to help you drive growth. As your business grows, you will need additional staff to manage the growing operation. Too often, the owner gets caught up performing tasks that need to be delegated to others. In every business, there are finders, minders and grinders. The finders are the owners who spend their time finding new markets, new products, new services to grow the business. Minders are the people who mind the business, like managers, procurement staff, accountants, sales people. They keep the business running smoothly. And grinders are the people who perform the work for the business. Quite often, the finder gets distracted by minding and grinding activities and loses focus on the finding activities that are essential to business growth.
In summary, growth is necessary to maintain a healthy, sustainable business. Continually review your strategy to ensure your business is serving the current needs of the marketplace in order to maintain a steady growth pattern. To discuss developing strategies to grow your business, contact a B2B CFO© partner for assistance.