Time, cash and people. That’s it.
Most companies want to grow, and to grow profitably, but they are often hampered by a few critical weaknesses in these three key areas and the lack of a clear plan to grow over the next 3 years. This is very typical, particularly for more entrepreneurial organizations where owners find it difficult to look around corners and peer into the future.
So what does it take to grow?
Time is the great equalizer. No matter who we are, each of us has only 7 x 24 hours each week. We can waste our time or be efficient in its use, but the amount available is constant.
With the right strategy, most businesses will grow at some rate (as the population increases for example) but time alone is not a means of distinguishing how fast one business can grow versus the next.
Growing companies eat cash. As sales expand – so do accounts receivable and inventories. This “working capital” need is often misunderstood and underestimated by business owners and can really limit their ability to grow. If the rate of growth is modest, then the cash generated by the company may be sufficient to meet these increasing working capital needs, but many owners don’t want to have their growth limited to the rate at which the company can self-finance.
The problem is usually solved by increasing a bank line of credit or by the owner (or other investors) putting more cash into the business, to the extent that they can.
Having the right people on board is really where any business can exert a strategic advantage over its competitors. With the right people, the right things get done and get done effectively. With the wrong people, even if their activities are effective, the goals may be wrong.
It has often been said that investors would prefer to invest in a great management team that has a mediocre product or service, than to invest in a mediocre management team with a great product or service. The great team can be relied upon to make the best of a weak product or service, or migrate away to one that is superior, whereas the mediocre management team will likely bungle their stewardship of the great product or service that they have.
Getting the right people on board (or “on the bus” as we like to say) doesn’t happen by accident. It requires a dedicated determination on behalf of owners to search widely and with great patience to find “the best” members for their teams and then to create an environment in which “the best” will feel that they can make a worthwhile contribution, be recognized for their achievements and receive above average rewards if they are successful.
If you are serious about growing your business, follow these steps:
- Identify and address any immediate barriers to growth or threats to survival.
- Develop a clear vision of the future, including a workable 3 year growth plan along with the means to achieve it.
- Develop a basic organization structure that will support the 3 year plan.
Without this kind of planning you may find yourself hampered by the day-to-day focus on driving revenue and controlling costs without proper direction.
If you would like guidance to move forward on this, Kathbern’s Accelerator Program has been designed address this critical need. Contact us at email@example.com to schedule a free 90 Minute Starter Session which will help you to see your goals more clearly and to identify the major issues that may be preventing you from reaching them.