Growing a business. The power of 4.
Much of our work in the past has focused, naturally, on growing businesses – looking at their current opportunities, their capabilities and their activities. Over the years our experience has enabled us to look at this by evaluating 4 keys areas of the business:
- The strategy – the quality and potential of the business model and whether it sets the organisation apart competitively, not just in the short term but more importantly in the long term too.
- The structure – the quality of the organisational team and their ability to work together effectively.
- Operations – the ability to deliver reliably and efficiently as the size and scale of the operation increases.
- Finance and performance – both the availability of capital and the ability to maintain a good solid cash flow.
We therefore seek honest answers from the organisation of these 4 simple questions:
- Am I ready?
Am I ready to build a team and delegate some of, and possibly a great deal of, responsibility?
This is a key one and often one of the most difficult things a business owner can do. It is however vital if a business is to scale above its current state. The owner must move away from working in the business to a state where the owner is working on the business.
- Is the business ready?
Are the necessary controls and systems in place?
Again this is a key area of business growth. Businesses that have grown organically, either quickly or over a period of years, do not necessarily have the systems and processes in place to deal with further rapid growth. Businesses with existing controls and processes in place may find that these are now not fit for purpose should the business grow further.
- Is the market ready?
Has the business established a clear and distinctive presence in the market? Are there enough customers to warrant further investment and expansion? Again this is a key question and warrants some careful thought about the direction of growth. Should the business seek growth simply by looking at market development or are there other opportunities through diversification or new product / service development? See below
This is a fairly simplistic model to demonstrate the clearer options open to businesses. It does not necessarily allow for the aspects of business model innovation as a way of growing a business.
- Is the business ready financially?
Is there internal cash generation? Is additional investment required and if so where is that money coming from and what are the implications?
As the business moves from stage to stage in the growth process these questions need revisiting and reassessing. The implications are different as the fundamental issues change. Early in its development, the key issue concerns the development of the product or service, but once sales begin to grow this will quickly lead on to issues which relate to building an organisation. Future issues focus on dealing with the change agenda, when both strategic and structural / managerial change decisions have to be faced.
If you would like to know more about how we can help you grow your business please click here