William S. Burroughs, one of the most influential authors and artists of the 21st century, is credited with the following quote: “When you stop growing you start dying.” His advice was intended for individuals, however, the wisdom applies equally to businesses.
The world around us is constantly advancing and changing in countless ways, presenting challenges and opportunities at an ever-increasing pace. Generally speaking, businesses that are able to adapt and grow by seizing the opportunities and managing the challenges will be rewarded with success. Those that seek the illusion of comfort and safety in the status quo will be left behind and, in all likelihood, fail.
Having said that, small businesses, once through the start-up phase, can be very difficult to grow. Having experienced that initial success, owners can be reluctant to push on, and unsure of what to do. Also, they tend to lack the necessary resources, both in human and financial terms, to undertake the investments required to safely boost revenue and profitability. And forging ahead without being adequately prepared can spell disaster for the unsuspecting entrepreneur.
Small businesses are unique in many ways, and developing a growth strategy that “fits” the situation takes careful analysis and planning. So to start the planning process, there are a number of basic options that can be considered.
- Increase sales and market share by acquiring new customer relationships
– Expand into new domestic and/or foreign markets with existing or new products
- Purchase a competitor
- Form a Partnership with a complementary business
Each of these strategies have pros and cons and success factors to be accounted for in the analysis. Engaging the management team in the process and seeking professional advice where necessary will make for better decisions and outcomes.
One of the common attributes of successful growth companies is an obsessive focus on customers. They understand their customers and nurture strong relationships. Powerful product innovations often germinate in the collaborative environment of a trusting and loyal customer relationship. Developing new products or modifying existing products to meet a customer’s evolving needs, creates an unbeatable win-win scenario.
These companies are also eager to recruit and retain quality talent pools that bring the right mix of skills and experience to the business. They invest in training programs and create merit-based opportunities for advancement.
Finally, it’s important that a growth strategy account for the financial resources necessary to support the increased demands on working capital and higher operating costs that typically accompany revenue growth.
Growth is necessary to sustain a successful business. How you go about it as a business owner is a process like any other. Careful planning, well managed execution will see you through.