Are You Ready to Grow Your Business?
There comes a point in every business owner’s journey when they begin to question whether or not they want to grow their business. In fact, for most entrepreneurs, that question will come up more than once throughout their careers. We asked five business owners for their advice when it comes to growth: When should you grow your business? How should you do it? What should be the first question you ask when you decide to expand? Here are the most important pieces of advice they shared:
CEO/Owner, The Alternative Board Southern California:
When you feel you are being dragged along by your fingernails, it’s time to embrace growth.
Had to miss that yoga lesson or run because you were too busy? Thinking about work instead of attending your kid’s game/performance? Then it’s time to bring on new team members to help reduce your workload. Not just for the health of your business, but for your own sanity.
President & Owner, The Alternative Board Tennessee Valley:
Control and planning prevents surprises and problems that come with growth.
A business is ready to grow when its foundational infrastructure, marketing plan, and strategic plan are in place. When the business has the space and the ability to hire competent personnel and acquire other assets as needed, it’s ready to grow.
Before scaling up, the business owner should do a cash flow and working capital analysis to determine if the business can fund itself adequately as it grows. Financial preparation and knowledge of both current and future needs must be evaluated to avoid cash problems and unpleasant surprises that can come with growth.
Common pitfalls to avoid are growing faster than the business can fund itself and avoiding poor customer service that can come with lack of preparation for additional sales volume. The business owner should also create a strategic plan, with projected budgets, to avoid surprises and provide a baseline of what to expect and a plan that can be measured against and adjusted as growth occurs.
TAB Facilitator, The Alternative Board South Central Kansas:
Know where you want to go.
Know how you want to grow personally and professionally through a carefully thought out personal vision statement. Be flexible while you plan for growth, and your next steps will become apparent.
Nail it and then scale it.
You shouldn’t embrace growth until you know how much it will cost for you to pull in additional customers — likewise, you need to know how much those customers are worth before you take any debt on to scale your business.
So often I see fellow entrepreneurs take small business loans to build their business before they have built a scalable model. Make sure you have a sustainable plan before jumping into things.
Delegate or outsource as soon as you can afford it.
One of the best ways to assess whether or not your business is ready for growth is when you see the value of every hour you spend on your business rising. Let’s say when you’re starting out, you’re making $100 for every hour you spend working on your business. That hourly value rises when you take in more clients and get more work. If you’re doing your own accounting at your hourly rate (at $100/hour), it would make more sense to hire someone else to do it for you.
If you keep doing everything yourself in order to save money, you’ll end up spending more money because you’re paying yourself too much for tasks that are better delegated to someone else.
While all of their answers differed slightly, many of the business owners interviewed focused on three things: having a vision for your company’s future growth, having a plan for how to follow through with that vision, and finally, knowing when you’re working below your own pay grade.
If you think it may be time to scale up your business, but you don’t know how or when, The Alternative Board can help.Get in touch with a local board to see how our peer advisory and business coaching services can help you create a better plan for delegation and achieving your personal vision of success.