Is Your Business Prepared to Grow?
7 Things to Consider
For many businesses, 2020 was a challenge. As we begin 2021, is your business prepared to Grow? Whether your business prospered or struggled in 2020, for you to grow in 2021, you need to be deliberate in the evaluation of your business and in documenting a plan for your business. Here are 7 key things to consider as you develop your plans for 2021.
1) Do you have a plan for the year?Many business owners take little or no time to plan or think strategically about their business. Too often we are so busy working in our business that we fail to plan for our business.Taking the time to think strategically about your business and planning for the following year is critical to advancing your business. Without a plan, our efforts often become reactionary versus proactive. The business becomes the master vs you managing your business. We would never start a business without a plan, unfortunately that is where many business owners stop. Having no plan can result in either frustration over a lack of results or confusion as to why we see no change year after year. Take the time to develop both financial targets and strategic initiatives.
2) You should identify specific financial targets – The obvious financial targets are sales volume and business profit. However, you could also look at inventory volume or specific cost reduction targets.
When setting a sales target for example, you need to do some analysis and evaluation to determine what a realistic stretch target is. How much of your business is repeat vs new? Is your current customer base the same today as last year, if no, why is it different? Is their purchasing behavior the same or different in the past and how do you provide value to your clients? Answers to these questions will help you determine how much growth is possible. Think about the implications of growing your sales. Do you have costs associated with growing that may impact near term profits? If you need cash to grow what areas of cost can you reduce to help improve near term cash in support of your growth? Once you have a target, you need a plan to monitor progress during the year to determine if you are on track or need to adjust things in the company or your expectations.
3) You should identify a few key strategic initiatives – these are areas of your business that need your focus during the year. These could include specific process improvements, staff development, adjusting product mix, or some other key thing that will make a significant difference in your business going forward. An effective way to develop these initiatives is to perform an honest assessment of your current business. What is going well, what needs improvements and what has been neglected. Pick 3 or 4 things. Once you have the initiatives, set a target date for completion, identify the steps needed to accomplish the completion and assign responsibilities in your organization to help make it happen. Then like financial targets, you need to monitor progress and hold yourself accountable.
Is your organization growth ready? Have you thought about the capability of your organization to support additional business activity? Do you have the processes in place to ensure consistency of grow? Is your staff ready for additional responsibilities? Do you have an organizational structure to delivery to your clients? Do you have the room to grow?
Operational issues to support growth can often be overlooked. Think through the implications of growth to avoid having to react when you get the additional work. Prioritize what you need to have in place to grow and what can be developed as you grow. This is not a once and done but a continual evaluation that must be done as you grow.
For example, evaluate your staff. Do you have the right people? Do they have the capability? What do you need to do with your staff to support the growth? Does it need to happen first, or can it be done in parallel with growth., what steps are needed to enable you to be ready for growth?
4) Is your supply chain growth ready? As we look to expand, do you need to expand your supply chain? Evaluate everything you buy; can you get what you need in the time frame required as your grow. I have experienced issues with packaging that has limited growth in a business I was involved with, I learned the hard way to look at everything. Perhaps you will need to find additional vendors to avoid implications of a vendor who is not able to deliver? How do you qualify them and evaluate their supply to you? As you consider your growth proactively evaluate your vendors to ensure they do not impact your ability to grow.
5) What is the impact to you if you grow? Have you thought about your role in the business and what increased level of business will mean to your daily routine? Increased growth can produce additional financial rewards, but again you need to understand the impact to the organization and the impact to you personally as the owner. Will you become the bottleneck if every decision requires your input? Do you have If you have a personal vision statement that identifies your personal goals? For example, if you want to be more involved in sales and less in operations you need to have people and processes in place to accomplish that. Ask yourself the hard questions, are you currently satisfied with your role, is your work life balance acceptable, how would you like to see your role in a larger company. Once you know what you want, your organization can them be organized to achieve those goals.
6) Do you have a trusted advisor who helps you and holds you accountable? Growth involves strategic thinking, some change and discipline of follow through. The process you use in developing the plan and then monitoring progress are as important as the plan. Who do you depend on for input and advice? Do you have someone who will give you their honest perspective as an outsider? Can you be completely open with your trusted advisor including expressing your concerns regarding the growth, your company, and your abilities?