The following article by Brendan Dowling appeared in The Sunday Business Post.
Growing Your Business
Should I accelerate the growth of my business?
If you have already created a successful business, you have gone through the tough times of getting it off the ground, you created a product that people were willing to buy, you won your first customers and you are now at the point where you can enjoy a level of income that makes it all worthwhile, well where to next?
Do you continue as you are and enjoy the comforts of your labour, without trying to stretch yourself or the business (some call this a lifestyle business) or do you “bet the farm” on accelerating the growth of the business, to make it a huge success? This all depends on your ambition and level of motivation; most entrepreneurs that you meet are driven by their vision of how their business can conquer the world and make a significant difference in the market that they serve. I am sure that you are like this, you have already proven that you are an entrepreneur who is prepared to take risks. So if you are waking up at night or getting distracted all the time, with this vision of what the business could become burning a hole in your head and the clarity is so real that you can see what success looks like, then you have the ambition that is needed to accelerate the growth of your business. So what is stopping you?
Fear: fear of failure, fear of losing everything you have worked so hard for, fear of what people would think or say, fear of how much time, energy and possibly money you may need to invest in to driving for growth. This is a legitimate thought process and in many cases entrepreneurs don’t go for growth because of this fear. But the fear you have is based on what your have experienced to date and on what you know about your business as it stands today, if you continue to do everything the same way. But more often than not the facts as they are today are not the basis for growing your business, so the fear is unfounded, yes there are risks, but these risks can be mitigated. How do we mitigate the risks?
Start by stepping in to your helicopter and observe your own business from a strategic point of view (commonly known as the ‘helicopter view’). Look at what you do well and what are your core competencies within your business, things that add value and that differentiate you from your competitors, these are areas that you need to develop and manage as you grow the business, but other more operational areas can be handed over to someone else to do. For example:
- if you make a food product in your home kitchen, people love the product for its taste and the packaging, but to scale the operations you need to build a purpose built kitchen, buy industrial ovens, packaging machines etc. Why not outsource this to a company that already makes your type of products, you focus on getting the recipe perfect, you help them source the best ingredients and you design the packaging, but you leave all of the manufacturing to someone else.
- If you have developed a software product but you want to reach a wider market, the problem might be the cost of hiring a sales team and paying for big marketing campaigns. If you have a great product with good margins, you can find a partner who has already got a brand, a sales force and big marketing budgets and they will sell the product for you.
There are lots of examples, but suffice to say that if you focus on mitigating the risks associated with growing the business, you will realise that there is nothing to fear, everything can be managed.
There are also many different ways to manage your costs as you grow the business, it doesn’t mean spending lots of money that you don’t have, again there are too many examples to list, but just to get you started:
- Many growing companies hire new people, including senior executives, on a part time basis (by the hour) you don’t need to hire the full time team until they are absolutely needed and their cost is covered by sales revenues.
- Keep the office small, many companies encourage their workforce to work from home.
- Use all the free or very cheap online services for managing the business like Skype, Dropbox, Google Mail, Google Docs, Microsoft 365, SageOne, ROS, Zoho, Cloud Hosting etc
- Keep the international travel to a minimum, in the current market customers are fine with online webinars for presentation and demonstrations, using Skype to conference etc, they are all doing the same, even the large corporations.
There is a new trend towards growing companies by only having a small senior management team focused on the key value creations areas of the business and outsourcing everything else such as Accounting, HR, Engineering, Manufacturing, Logistics, Customer Support. There has never been a better time to scale a business with minimal costs and minimal risks, the key to it is to scale your costs in line with your sales, keeping an eye on your margin all the time. If you do this well you can control the steady growth of your business and some day you will be standing in the boar room of your hugely successful business and you will have realised your vision. If you got this far you can go all the way, be sure of that and mitigate the risks, so you don’t ever bet the farm on growing the business, that’s for gamblers not entrepreneurs!