How To Grow Your Business - 5 Key Tips
The "Business Life Cycle" describes the various stages of building a business, and it's made of four distinct phases: introduction, growth, maturity, and decline.
Like a human life, each phase is characterized by different activities, needs, and challenges. Also like a human life, a Business Life Cycle may last a century, decades, or a few precious years.
You'll know your small business is in the growth phase when you see revenue increase, add employees or suppliers, and get a sense your brand is being accepted in the marketplace. You'll likely have more customers to serve and be less worried about day-to-day cash flow. With the first few tentative years of the introduction phase behind you, it's a time when you should be focusing on strategies to build your business.
Growth can only be achieved when the owner or manager spends more time working on the business than she does working in it. To help you rewrite your job description for this exciting period of business development, consider focusing on these five areas:
Delegating
As the Owner/ Manager, it's your job to manage operations, not to do the day-to-day work. That can be a difficult transition for hands-on people who don't believe anyone else can get the job done as well as they can, or for people who love to micromanage. If that describes you, try placing a euro value on your time to snap things into perspective. For instance, if you want to earn €100 an hour, then surely you can justify paying someone else €20 to do the things you used to do.
Delegation begins by thoroughly listing all non-essential functions, tasks, and responsibilities cluttering your inbox. Non-essential tasks may include data entry, ordering office supplies, website updates, bookkeeping, producing your product or service, or completing paperwork. Make a list and then set out to find people to do those things, either by hiring a full- or part-time person or a supplier. In the growth phase, your job is to lead your business into the future and to orchestrate the work of others. Your time should be spent supervising your team, pursuing new customers, planning next steps, embracing opportunities for growth, and perfecting your small business systems. Realize that your role is evolving and resolve to trust others to get the little things done.
Building Relationships
Too often, a business owner gets so bogged down with daily operations that he or she neglects to spend time with important customers or suppliers. While your staff may handle ongoing customer service, fulfill orders, and process sales; it's your job to ensure your customers are genuinely happy with your business. Remember, it's always easier to keep existing customers than it is to find new ones.
In today's electronic world, it's too easy to fire off an email to your important clients. Instead, take the unusual step of making live contact. Set up client lunches, make phone calls, and arrange coffee meetings. Get inside your client's location as often as you can. Try to cultivate relationships with people inside your client's operation in addition to your main contact...just in case that person leaves the company.
Similarly, spend time with your key suppliers. Visit their locations and invite them to yours. Get to know who's behind the scenes, supplying your business with the goods or services it purchases. Learn about new supplier technologies or developments that could be used to improve your bottom line. Share your pain points with your suppliers and ask them for suggestions.
Strengthening existing relationships requires a commitment of your time and a willingness to get out from behind your desk. However, you might just enjoy this new role, and discover new business opportunities in the process.
Analyzing Numbers
You may hire a bookkeeper or accountant to take care of your day-to-day record keeping and to generate financial reports, but it's your job to manage your company's financial performance. Key Performance Indicators (KPIs) are simply important numbers or financial ratios used by a business manager to make decisions.
While the numbers you choose to monitor will be unique to your business, most business owners like to keep an eye on monthly sales, projected cash flow, receivables, inventory, and operating expenses.
From whoever does your books, ask to receive up-to-date monthly financial reports. Work with your accountant or a business coach to learn which numbers and ratios are most important, and how to act on them.
Building systems
By definition, a business is simply a set of interrelating systems working together to produce profit. A large business may have thousands of systems spanning manufacturing, administration, human resources, marketing, accounting, research, and distribution. A small business may consist of just a few dozen systems. Systems are processes and procedures used to achieve a result. It's simply the way you do things.
The first step is to document all of your systems, no matter how small and seemingly unimportant (such as the way an employee answers the telephone). Start by naming each of your systems and then write down the steps taken within each one. Print out each system and place it in your new operations manual. Use your operations manual to train new recruits, create new job descriptions, or to eventually franchise your business.
Once your systems are documented, all you have to do is allocate some ongoing time to continuously improve your systems. Scrutinize how your systems perform. Ask employees or suppliers to make suggestions to help improve your systems. Your goal as the owner is to identify and implement improvements to your systems that will help save your business time, money, and effort.
Marketing
While you may decide to hire a marketing agency or a marketing staff, you should never completely let go of this important responsibility. Marketing includes sales, publicity, branding, pricing, advertising, distribution, promotions, and customer service. It's how your business brings in money, and therefore requires your leadership.
As the founder of the business and the one who oversees the finances, you must set your marketing strategy. Who is your target market? What defines your brand? Where will you find new customers? How should you allocate your hard-earned marketing dollars? Spend your marketing time developing or refining your marketing goals and strategies, but delegate much of the execution.
The growth phase of the Business Life Cycle is usually the most satisfying because you are watching your newborn business mature. It's a time when most small business owners start to worry less about survival and focus more on the future. To take your enterprise to the next level, start by writing a new job description that allows you to spend more time building the business and less time doing the work.
by Entrepreneurship Expert Roger Pierce, BizLaunch.ca, January 2008