How to stop “getting bigger” getting in the way of your growth
It’s an oxymoron right? How could getting bigger possibly get in the way of your growth? Well it can and it quite often trips companies up. Why?
Getting bigger is different from growth.
You can get bigger in terms of sales, customers, staff but that doesn’t necessarily translate into growth for your business. And by growth I mean growing margins, growing profitability and growing in the right strategic direction for your company.
It’s all about focus and getting the maximum return for your efforts. But to get the maximum return for your efforts you need to know where to focus. For all lot of start ups and smaller businesses the initial years are about being across all the details and being involved in every decision however small. It’s not so much about processes or reports…..and that’s a good thing. You need to be a generalist and you need to be across every detail and at a certain size that’s possible even with very little process or reporting because you’re at the coal face – you know exactly what’s going on because you are there. But as you grow this isn’t possible without processes and a way of focusing on the important indicators within the business.
Product or service margins – which are your most profitable revenue streams? Are there areas of the business which are consuming a disproportionate amount of resources? This includes your own time. You’re the most important resource in the business – are you spending it where it counts?
Profit margins – is your business scaling? Where can you get more efficient?
Strategic direction – do you need to invest strategically in order to achieve your business goals and do you have the framework to monitor these initiatives? Equally do you need to stop investing in certain parts of the business in order not to spread your resources too thin and to remain true to your business’ vision?
Cashflow – Are you keeping a tight rein on your cashflow as you grow? Are you managing your cash inflows so that you are always able to pay your debts as they fall due? Many a company though profitable on paper has stumbled and folded due to lack of cash.
It is far easier to set up the processes and tools you need to keep on top of these key indicators before there is a real issue. These tools will help you focus and allow you to keep working on the business not only in the business.