Recognising the different stages of business growth and understanding how to determine whether the time is right for your business is key to the process. “Every family business reaches a plateau,” writes Angela Stringfellow, a principal at CODA Concepts, on the Intuit Small Business blog.
“You’ve maxed out your current capacity, but you’re hesitant to hire another employee, open another location, or take another step forward.”
Identifying that your business is ready for you to take the next step can be tricky. There are no specific indicators common to every family business and every situation, but there are a few questions that one can use to assess your readiness for growth. For one, you might ask whether there’s too much work on the table for the current team to manage.
Is your business ready for growth?
If the volume of work generated by your business outweighs your capacity to complete the work, you may need to consider expansion to meet expectations and to deliver at a consistent standard. It’s critical to keep market research at the heart of all expansion decisions and considerations. Results from market research offer valuable information for your business, and may reveal new potential and opportunity that you hadn’t yet considered.
In addition, understanding market shifts and your consumer can facilitate a better understanding of whether expansion is really needed. Relying on old market research reports and out-dated results may prove detrimental to your business, so it’s important to consider the role of research in your day-to-day business management and strategy. In the same way, choosing to follow the same business approach and plan is not always the most effective strategy for business growth.
The importance of flexibility
There are a number of different strategic approaches that a growing business might consider, for example: a business may choose to keep the core competencies in-house while outsourcing additional resources to help with the other components of the business. Allowing your business plan to be a flexible and workable document can facilitate a sustainable future for your company.
As your business grows and the market changes, you need to be able to evolve your strategy and approach. Changing circumstances and a stagnant business plan don’t make for a good fit, and remaining inflexible will be to the disadvantage of your business’ growth prospects. It’s important to remember that when you started the business, it was very likely that your growth strategy involved a big drive for customer acquisition.
Your business plan and approach would have been centrally focused on achieving leads and developing new customer relationships. As your business settles, and you reach a comfortable level of stable growth, a shift in approach and focus is needed. Instead of customer acquisition, your focus should shift to customer retention – this is to ensure lifetime value from your customer base.
Realising the opportunity for growth
Another relevant question for you to reflect on is how successful and effortless your lead-generation currently is. If your business receives high volumes of valuable leads (with limited effort or investment), it may be an indication that there’s a reasonable level of demand for your product or services. If keeping up with these leads becomes a challenge, the opportunity for growth is definitely rife.
Once the opportunity for growth has been recognized, ensuring that you put effective measures, processes, and strategies in place will ensure that you have less to alter and contend with once growth has taken place. Every major decision during the growth phase needs to be mapped out and planned, in a similar fashion to when your business was just getting started. The practice of prioritisation becomes increasingly important and relevant as your business expands.
Recognising your business’ growth potential
Understanding and indentifying the key drivers of growth is a good starting point, and will assist in outlining which tasks and activities need to be tackled first or given the most attention. Be careful not to be too opportunistic when it comes to growth potential. Expanding into areas that are an ill fit for your business strengths and competencies may place undue stress on your company and employees, and may translate to a shift away from your original business vision.
Family business growth presents the business owner with a number of challenges and opportunities. Each of these demands a different approach, a different solution, and a shift in the way the company does business. It’s essential to remember that the processes and strategies that were effective and workable when your business was smaller, may not offer the best solution in the business’ growth phase.