The First Steps In Growing Your Business, Get The Right Help.
Growing your business is easy, right! Successful businesses often start small, grow over a period of time, and then hit against a restrictive barrier before they can scale to new heights. Many never make it to the next level of success. Maybe it’s not so easy after all, so why is this?
Getting a business off the ground takes a certain skill set and determination on the part of the business owner(s). Having the right products or services obviously helps. Once trading, businesses tend to evolve over a period of time, wherein the skill set within the business and the infrastructure that supports it, allow the business to grow to a certain size. However, to get to the next stage in the growth cycle, there needs to be a seismic shift within the business to get it over the restrictive barriers that hold the business back.
Infrastructure is one of those barriers and people are another. Assuming that access to capital is not an issue, most businesses will find that they need to invest in new buildings, technology, and equipment to significantly enhance their ability to grow. Similarly, they need to invest in new people. This creates organizational complexity, which often stretches the existing management team. New processes are needed to ensure that the business continues to be run effectively, and new skills are needed to help command and control the enlarged operation.
Many businesses simply cannot make the leap. There is a glass ceiling preventing the necessary realignment and sometimes, existing executive management may not have the in-house skills to move the business to the next level of growth. This should not be the end of the matter though. Businesses can choose to bring in external help to get them past the revolution and into the next evolutionary period.
It all starts with recognition of the status quo. There needs to be a root and branch review of the business and the market(s) in which it operates. There is little point in making significant investment in a business if there is a limited market for what it has to offer. Similarly, if the business is monopolistic or part of a small cabal of businesses in a particular industry, it may not make sense to try to grow by attacking existing market participants. This can drive down price for everyone and there may be no winners going forward.
The key message here is that a business owner needs to really understand the market size, the market dynamics, the competitors, and the market opportunity going forward, before investing capital in a larger more complex business operation. But how many business owners take the time out to carry out a detailed internal and external analysis? How many business owners think they know all the answers, based solely on intuition, without doing the necessary legwork?
Yes, it is expensive to go to the market to hire the key resources that will help a business to make the transition from being small to medium or from medium to large. But there are other options open to the business. Perhaps it should consider looking for external experts from within the management or business consulting industry to act as a sounding board and to help identify the reality of the market opportunity.
As a trust relationship is built, the same contract hires could be used to assist in planning the transition and to execute upon the plan with the existing executive team. This takes a lot of risk out of the process, and in the vast majority of cases, the investment will more than pay for itself in terms of risk mitigation or increased business activity and profit.
One of the issues here is that many business owners see professional advice as a cost to the business and not as an investment. This is a big mistake. If it makes the transition to growth-phase a lot easier, and there is no ongoing cost, then the investment can make absolute sense. If one was to consider the cost of bringing in a permanent executive level new hire, against the cost of an external consultant, it quickly can become apparent that the cost of the consultant is miniscule in comparison. This is particularly so, if the consultant can deliver a skills transfer to the existing management team, when these skills do not reside in the business already.
And even if you are not yet at the stage where your business is approaching a revolution in terms of growth barriers, it is extremely useful to have an experienced consultant on a retainer, to act as a sounding board for the CEO, without the risk of Groupthink recommendations from within your own business. The cost of an external advisor on retainer can be way less than the cost of your most junior employee, or perhaps even less than the amount you pay to have your offices cleaner each year. Think about the value you gain instead of the price you pay, and you won’t go too far wrong.