Our company is facing a growth hurdle: We’ve never averaged the level of sales/day that we have an opportunity to do this year. Worrying if I’m trying to take on too much. Excited about the opportunity for growing revenue and sustaining it. How do I best steer my company through this challenge?
Thoughts of the Day: Avoid the trap that too many businesses experience: up and down revenue growth due to taking on work they cannot sustain. Be mindful of the gifts the economy will, or won’t throw your way. Plan growth in stages.
Figure out what your workforce, plant and equipment, and even your suppliers can reasonably take on. Since most companies operate within their means, it is unlikely to expect you’ll double output, or even increase by 50%, with your current resources.
Good financial health of a business
The more growth, the more challenges, the more things needing fixes, the more time and resources that get used up dealing with all of that. If you run out of time, you’ll need to speed things up by purchasing ready-made or near-ready solutions. Can you afford that? How big is your war chest?
Consider partnering with another provider to spread out the work and the risk. Rather than taking on all of the challenges within your company, bring on one or more partners to divvy up the opportunity and the risk that goes with it.
Take a look at the economic cycle that you’re in. Are buyers ready and able to spend on new solutions? How many potential customers will continue just doing what they’re doing today until you’re ready to go after them?
Growing and sustaining revenue
Get accurate research to tell you how big the market is and what to expect in the future. What are the long-term prospects for the new product or service you’re pursuing? Can you continue to cash in on opportunities as you grow?
If buyers pursue a different solution now, what’s the role of brand loyalty? How many can you get back when you’re ready to take them on? What competitive advantages will you gain later on by first focusing on a select group of high-quality customers?
Who are your competitors? Why is there a gap in services right now? Is this a temporary opportunity, or a long-term market shift? How long before any 1,000-pound gorillas enter the market, and what can you do to avoid them? What about buying a competitor to get a leg up?
Make a plan for growth over time
Build a set of success stories by winning over one customer, and then the next one. Use success stories to help sell the next round.
Focus on profits. Better to make a significant profit on a smaller growth hurdle, than take on a huge growth opportunity. Growing and sustaining revenue takes time. And without a plan you could end up with little or no profit to show for the effort.
Map out expansion. Build solutions before you need them. Have to hire new people? Find someone to help you bring on “right fit” employees. Need a lot of additional supplies? Go shopping for vendors who can support your growth needs. Need more space? Line it up ahead of time.
Build a budget growing and sustaining revenue
Define how much you can afford to put towards growth. Slow the growth pace down so that you can catch and correct mistakes early on and stay within budget. Use the money you save to fund future growth.
Define how to track activities and results. Consider profit/item delivered, reserves vs. plan, time, and cost to produce. Factor in quality and error rate, customer satisfaction, revenue per FTE. Reports can help everyone know what’s on plan and where things need tweaking.
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