Despite the odds being stacked against you, your business has survived the first crucial couple of years; all of the challenges you faced and risks you took have paid off. At this point, things are probably running smoothly with a good customer base and healthy profits so you’ll natural start thinking about growing your business. However, a pitfall a lot of businesses fall into is confusing short-term success with a need for growth. This is often not the case, as two thirds of the fastest growing businesses are now failing and having to downsize.
Starbucks, for example, had to shut 600 stores in 2008 due to overexpansion. The stores started eating into each other’s business and a leaked memo from founder Howard Schultz explained ‘stores no longer have the soul of the past’. They were too focused on making profits that they forgot where their success came from, the customers. Ultimately, overexpansion can damage a company’s reputation through customer neglect and poor business planning.
Growing your business can be likened to growing a flower because once you plant the seed, often you won’t see any progress for a long time. You need to work hard to nurture it everyday, giving it the care and attention that it needs to spread its roots over time to support its growth. Eventually your efforts will be rewarded and it will blossom for everyone to see. However if this process is rushed, the flower’s growth will be unsustainable and it will inevitably die.
Ruta Gabalis, CEO of AeroBlue, is a business expert that has dealt with companies first hand that are either looking to grow or failing due to overexpansion.
Gabalis offers some helpful tips on what to consider in order to grow your business in the right way.
Do Your Research
This should be the first thing you do before anything else. Growing your business may mean you’re expanding into unfamiliar territory, which you need to prepare for. Firstly, keep an eye on your competition, see where they’re moving and consider how your business will be able keep up. This will let you see the current demands of the market and gauge what you need to do to stay innovative.
Secondly, looking into your own company is equally important to assess whether this the right time for you to be expanding. Having a bigger business may mean initially higher costs, expanding your business requires extra capital. Ensure you can afford this, factoring in the larger overheads and unforeseen costs.
Customers Are Key
As outlined with Starbucks, rapid growth can affect your loyal customer base. Part of your initial success would have been based on the good service you provide. Customer perceptions are vital for small businesses so listening to their needs, maintaining the relationship and keeping them happy will attract the right feedback. If you expand at the wrong time your attention may be swayed, which compromises your service. For example, you may take on more orders than the business is capable of fulfilling or have so many customers that you lose the personal touch. To avoid this make sure your main focus remains around their needs.
Social media plays a fundamental role in customer service because this is where people leave the most honest feedback and it can be used as a platform to communicate with them. In terms of growth, social media has a huge reach so it can be a great way of attracting new customers, in the areas you’re looking to branch into.
Make a Plan
You wouldn’t have started your business without one so why would you consider growing it without. The phrase, ‘failing to prepare is preparing to fail’ comes to mind here. Keep hold of your vision and think about where you want your business to be in a few years time. Consider where you want to be and when, this will give you a chance to start planning how you’re going to achieve it.
It is also helpful to remember that unless outlined by investors, there is no set timeframe that your business should be growing at. Comparing yours to other people’s will only detract your focus, this is why it is important to set personal goals and plans for the years to come, ensuring there is a measured way to grow. To put things into perspective, be aware that a rate of growth even less than 15% annually, although seemingly unspectacular, will still ensure your company doubles in size over five years.
Invest in Your Staff
Expanding means you have to grow your business in all senses, which includes employees. It is not just your finances that may be strained by the extra business, your staff need to be prepared too. To achieve this, make sure the right training and development opportunities are in place, this will boost productivity and help your business become as efficient as possible.
Of course, you will also likely need to employ extra people to help share the load however this needs to be strategically planned also. There is often a risk of businesses employing staff to deal with the immediate business without having the means to pay them or keep them on long term. Try and find the right balance, you don’t want to over stretch your current work force as this will not only compromise standards but lead to job dissatisfaction due to the added stress.
Ruta Gabalis, the founder of AeroBlue, is a respected operational finance professional with a distinguished track record built during 18 years’ in SME and corporate environments. Holding a broad spectrum of financial control and finance & operations roles within high growth start-ups and enterprise businesses, she has taken ultimate responsibility for the design and governance of finance, controls and protocols to drive organisational profitability and growth. Ruta has build a reputation for original and inventive thinking across finance, operational implementation and team psychology, making her perfectly suited to orchestrating and delivering on financial management information systems, commercial improvement, restructuring and stakeholder engagement. Visit www.aeroblue.co.uk.
Source: Main home business mag
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