Every business seeks to grow and set themselves apart from competition and/or to become an attractive asset for someone to purchase.
There are some fundamental lessons to take on board relative to growth and how to establish these as part of the strategic business plan and/or succession plan.
- The biggest and most important lesson to manage growth is to not expand regardless of all else. Growth will take sacrifice and needs careful planning especially the funding requirements
- Management should also ensure they are measuring their time in the business and that they have the appropriate balance between family time and business time
I have always espoused that if a manager is spending more than fifty (50) hours each week in the business, there is either something wrong with him/her or something wrong with the business
There must be a strategy to invest in technology providing it stacks up as a substantial ‘value-add’ with a short payback period. Always be looking for cost improvements and cost downs/avaoidance.
When strategising the cash flow requirements of current and forward budgets there are three (3) basic but effective management principles:
- Ensure you work to a realistic budget and keep on top of financial management through the ‘Vital Signs’ of positive cash flow management
- Always have a confidence to invest to ensure you maintain a competitive market place advantage
- Ensure you use the principle of ‘If my investment/change’ doesn’t add value to safety, quality, and efficiency then don’s spend
Marketing the business capabilities is the best competitive advantage tool. Look after employees as they are your greatest marketing asset:
- You must establish marketing/promotional strategies which draw people to the business. These are the true potential clients
- You must benchmark against competition. The strategy is to know more about the opposition than they know about themselves
Establish a best practice employee development policy/procedure where you offer every layer of the organisation a future and purpose in life.
- Be prepared to strategise multi-skilling of the workforce and when an employee reaches competency in three (3) different work skills recognise this in their hourly rates
- Be known as a business who values every employee and is prepared to provide them with an opportunity to advance through skill acquisition
Any owner knows, the growth and development of their business is not always smooth and positive. There will be declines and slowdowns which will be challenging and if this persists for too long and the situation becomes critical, it will then be time to consider commissioning a mentor or turnaround specialist. Someone who has been there and done that and can relate to employees at all levels through personal achievement and success.
There are some basic signs which point out that a turnaround expert is required:
- Increasing pressure from creditors
- Cash flow management challenges
- Concern over statutory authority payments
- Losing key staff
- Losing key clients
- Difficulty in obtaining finance
- Rapidly changing market
- Changing economic environment through government
Irregardless of the position you may find yourself and/or business in it is recommended that you commission an independent review of where you are and where you may be able to go relative to grwoth and profit.
There are many ways for an independent health check to be done, however it is always advisable to do this through an independent business expert.