Growth has been one of the key driving forces behind our entire humanity as we know it - centuries of capitalism and cultural nuances have led us to seek growth in ourselves, our communities, and our businesses. It’s part of our DNA, and considered a natural evolution of one way in which we can measure success and happiness.
When embarking on the journey to start a business, every business owner begins with the hope of a strong and successful future. Once you’ve moved past the startup period, a period of growth ensues. Few business owners, however, are ready. As a result, over-stretching, poor planning, or unexpectedly rapid growth could lead to the collapse of your business.
Here are some foundational signs that your business is ready for rapid, sustainable growth:
Going from the startup phase to the rapid growth phase requires passion, longer work hours, dedication and a lot of responsibility. If you are ready to put in your all while also managing other aspects of your life, you may be ready to take your business to the next level.
You know that to win new customers and keep existing ones means understanding their emotional needs, which will inform your business and brand strategy. Telling your story with a unique proposition that connects your business to these emotional needs is a growth cornerstone. Further to that, you and your employees should have a collective ambition and commitment to your business.
Financial management and corporate structure are two key aspects of any business and become increasingly important as your business grows. Having an understanding of your own accounting and finances will allow you to effectively allocate capital and resources, understand how financial investments will impact your profits, and sustainably scale your business. From a practical standpoint, your business should have the right legal and financial structure to ensure you and your business are protected. For example, if you are moving from sole ownership and are growing the business to add employees, you may consider converting to a limited liability company. Maybe you are aiming to go public and need to convert to a corporation.
Select the structure that benefits you the most. Being aware of your finances and company structure will also inform many other decisions. Do you require more capital to achieve your projected growth? In such a case, you can seek out an external investor such as an equity firm to get your business ready for rapid growth.
It’s part of our DNA, and considered a natural evolution of one way in which we can measure success and happiness.
It’s important to structure your business model in a way that is profitable in the long term. Your current revenue model should be performing presently, but you should take steps to maximize revenue and master your revenue model before taking your business to the next level. In addition to sustainable profitability, the road to rapid growth also requires cost efficiencies and a healthy profit margin. For example, using e-commerce and leveraging technology as opposed to a physical sales force will keep your overhead costs down drive up your profit margin per sale.
Your goals of expansion can only be achieved with capital. Growth is often dependent upon a business’s ability to generate and manage cash. Cash flow crises are a top killer of small businesses. As you grow, you will have increased expenses that include higher rent, utilities, more employees and inventory costs. You should also be financially able to weather unanticipated events, seasonal variations in business, and invest in new technology and capital assets. If you project a need for greater cash flow, you can consider engaging investors for external financing.
Knowing your business is ready for rapid growth involves having a strategy for growth that involves evaluating your vision, industry trends, market forces, competition, and target audience behaviour. e. Your strategy should also outline growth pathways for existing customers, new business, new competencies and new ways to market.
Your plan can be ever evolving, but it must help you react quickly and efficiently to marketplace changes. Consider how you are going to allocate your capital to grow, what your staffing plans are and how you are going to manage daily processes during all of that.
Thankfully, there are many tools and technologies that can enable companies to grow rapidly. For example, you can establish automated and/or integrated processes to allow your business to scale and diminish time to market. This can be supported by investing in software that that tracks finances, sales and talent - for example Xero, SalesForce, and Humi. Likewise, determine inefficiencies in your operations and invest in technology that can help you meet increased demands.
Many business owners start their business with friends or family, but the key to rapid growth is understanding that relationships above and beyond those are critical to fuel a successful and scalable business. In some cases, teams that have launched a business initially may not have the skills to scale the business over long term.
Look for employees with strong leadership qualities and that are masters of sales, finance, marketing and other aspects of your business. Identify and secure top performers early in their careers and retain them. Implement a flexible and agile succession plan to keep your employees engaged. Your management should also be an effective pitch team who can tell a compelling business story when looking for new employees or seeking new investors.
All of these considerations are real signs that your business is ready for rapid and sustainable growth. With the right foundations in place, you can grow your business without unforeseen complications.
While creating or evaluating your growth strategy, you may realize you lack the right people or need capital investment to meet growing demands. Skidmore invests in business leaders and family legacies who are ready to accelerate growth and master their industry. With 70 years of experience leading over 20 businesses, Skidmore expands regional brands into national players by applying capital and expertise to achieve market dominance. Contact us today if your business is ready for rapid growth.