How a strong business is like the colosseum in Rome.
Most business owners will state that they are keen to see their business grow. How many of these business owners, though, will know whether the business is ready to grow. In my time as a consultant I have seen things from both sides of the equation
- Businesses that have the desire to grow but are not ready
- Businesses that have been caught out by fast, strong growth because they were not ready.
Both aspects cause different sleepless nights for the owner.
In essence for a business to be ready to grow there are 4 pillars of growth that need to first be in place. Start growing a business without one of these pillars being in place and the risk of the roof crashing in around you is greater.
The ideal is for the business owner to create a business that can be compared to the ancient architecture of Rome or the Greeks. Something that will still be standing strong after a period of time and not something that will fall apart at the slightest issue.
The pillars are:
- The strategy
The quality and potential of the business model and whether it sets the organisation apart competitively in some meaningful way
- The structure
The quality of the entrepreneur team and their ability to work together effectively. Add to this the individual qualities of the entrepreneurs – they must have the key traits that many entrepreneurs have.
The ability to deliver reliably and efficiently as the size and scale of the operation increased – this might involve franchising or licensing
- Finance and performance
Both the availability of capital and the ability to maintain a positive cash flow are hugely important for businesses.
With this in mind businesses owners, like yourself, thinking seriously about growth should ask themselves four important questions:
- Am I ready?
Am I ready to build a team and delegate some of, and possibly a great deal of, responsibility?
- Is the business ready?
Are the necessary controls and systems in place?
- Is the market ready?
Has the business established a clear and distinct presence in the market? Are there enough customers to warrant further financial investment and expansion?
- Is the business ready financially?
Is there internal cash generation? Is additional investment capital required in the business, and if so, what are the implications?
As the business moves from stage to stage in the growth process these questions need revisiting and re-assessing. The implications are different as the fundamentals change. Early in its development, the key issue concerns the development of the product or service, but once sales begin to grow this will very quickly lead on to issues which relate to building an organisation. Future issues focus on dealing with the change agenda, when strategic and structural change decisions have to be faced.