Build A Strong Foundation Before Growth
Growing your business through expanding locations or service/product lines is a highly anticipated move by business owners. Looking forward to servicing consumers in a better way and increasing revenues and profit is the natural next step. Your business growth is on the horizon, you can picture it in all its greatness. But wait! Before you begin this new journey, shore up your existing business to ensure you have a strong foundation that is able to withstand growth.
Start off by taking a good hard look at your organizational chart. Are there measurements in place at each level that are satisfactory in proving performance? If not, take a moment to establish what is important to the organization, customers, and you in each area. Create measurements that will be regularly reported to you so you can monitor performance areas. I suggest creating the measurements in collaboration with the individual responsible for reporting to ensure that the specifics of the calculations meet your goals. If possible, perform historical measurements to show a history of years, months, and/or weeks. Make sure you include a trendline and are able to note occurrences that lead to sudden increases or decreases in productivity.
Once measurements are in place, analyze the roles of individuals and ask yourself: is this position necessary in this format or can we make improvements to individual responsibilities for efficiency? If you are overstaffed, address this immediately. If you are understaffed, work to hire and train suitable staff and show a minimum of three to six months productivity up to your standards prior to moving forward with your growth plans.
This is also a great opportunity to identify individuals from your succession planning resources for promotions in your growth strategy.
Next, take a look at your quality processes. Are you monitoring complaints and incidents? TIP: Complaints and Incidents are not merely measurements of negative interactions with customers, these are records of internal and external activities that lead to a service or product not being provided in the way intended. Each complaint and incident should be researched to identify the cause and correction. Proper procedure will permit the correction to be put in place while maintaining documentation for future monitoring. Do quality measurements exist in each area of your organization? Are there established standards and protocols, training procedures, and auditing requirements in place? If you responded no to any of these, now is the time to get these in order prior to growing your business.
Finally, be honest with yourself about your financial situation. If you are barely getting by, now may not be the best time to grow. Finding ways to improve your operational efficiency and lower your overhead costs can help. The only exception to this rule is if your growth will reduce your overhead and operational costs. Drill down into your finances and explore costs vs. income to discover areas of certain growth and areas of weakness. Take care of the weaknesses by eliminating them or improving them.
Do you have the appropriate supporting resources for your growth? This would be represented by banking loans and lines of credit, legal review of the area you will be expanding into, vendor assistance in new locations, market share opportunities, trademark and patent attorney review of new service/product lines, fully trained staff ready to take on this new endeavor, and equipment and IT capabilities.
You should be able to prepare a mock situation of your new service/product line or expansion over a five year period of time. Utilizing the information in your financial documents, create a mock situation and fine tune it so that your existing business and future growth have an even better chance of success.
April Salsbury, MBA is a strategist, an analyst, an operational guru, a recognized leader and C-suite global healthcare executive with drive and focus for competitive markets. Co-host of The Business Forum Show and regular contributor to various business journals, she possess multi-functional and multi-national competencies with more than 15 years experience in business and healthcare. Her expertise is in invigorating revenue growth and infusing value of lean practices in growing companies through improvements to cash flow and operations management.
Fueling revenue, growth and profit, Salsbury & Co. is a consultancy firm focused on helping businesses and healthcare organizations achieve excellency. Our specialists have executive experience combined with deep functional expertise to provide our clients with services that drive real impact and results.
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