Show me the money!
Or don’t, if you want to uphold consistent growth…
It’s a precarious position to be in, when a company is on the precipice of growth and expansion. When it’s been brought to the stage where larger premises, new products and/or extra staff are looking like a necessity rather than a distant goal.
Growth is something that must be sustained. When you’ve secured more people or a bigger office, these will still need paying for even when the spurt of extra business/good fortune begins to recede. Peaks and troughs occur all the time; by all means, expand your operations amid the time of feasting, but prepare for the famine, as it will occur.
Though you should always be aware of where your profit lies within your business, and have constant leads in your sales funnel, it’s easy for business owners to become hung up on the money. With a successful business comes great responsibility, and when you know you have people depending on you for their own livelihoods, the turnover of your enterprise can become the be all and end all.
At this point, firefighting can take over. A position where some growth has been achieved and the upkeep of this becomes so intense that you stop looking forwards. You follow the money, become obsessed with whether enough is coming in to cover all your outgoings, and forget about the fulfilment of the projects you take on, the quality of your service and any future expansion of your business.
The minute you do this, the growth potential of your company will begin to stall or even retract. You need operations, people and processes in place to uphold the steps you’ve taken to expand your business—your role as business owner must be to continue steering the business towards further success. If you can’t do this, your business wasn’t ready to expand in the first place.
Sustainable growth comes when you are doing things so well you could do them with your eyes closed. You’ve achieved a certain level of demand from your clients, and your delivery is smooth, possibly automated to a point, and of unwavering quality. In this position, any dip or negative impact from the business’s expansion will not have an effect on its baseline.
You can’t grow a business on random chances. You grow businesses on solid pipelines of custom. Pipelines that, once you take your eye off the ball to carry out your expansion plans, won’t collapse from a lack of attention.
Successful entrepreneurs work towards their goals all the time. They continually adapt and improve, yes, but they don’t chase every sale and change their offering just to win that business. Money is important, but it doesn’t come from a business being all things to all clients—well, not without the owner running ragged trying to find ‘the next big opportunity’. Sustainable growth comes from honing your offering and sticking to it, becoming known for that product/service, and never under-delivering. Only by penetrating and holding a market can you move onto the next one.
Diversifying is a good growth strategy but diversify too much and you risk confusing clients new and old about what you offer and where your skills lie. The more products you have that need managing will eventually make you feel like you’re herding cats. Be clear, be consistent.
As soon as you fulfil one goal, decide on the next. Work out how you will get there whilst maintaining your current growth. By all means, take inspiration from such as Richard Branson, with his great wealth and portfolio of companies, but remember where he started. After gaining experience and understanding through his initial venture, a magazine called Student, he launched Virgin, whose first incarnation was a mail-order record business. When this grew, he expanded into record stores, i.e. still remaining faithful to his core offering but taking it into an environment where it could grow and the brand could become widely known. A natural diversification brought the Virgin record label to the music industry. Only when these businesses achieved sustainable success did he move into completely different territory with the Virgin airline. Had Branson become consumed by his mail-order business he wouldn’t have seen the greater potential of expanding into physical outlets.
I’m not saying that you shouldn’t explore current opportunities, but equally, don’t get hung up on them at the expense of solid, true, achievable long-term aims.
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