Achieving Sustainable Growth
Recently, I was interviewed by the Wenatchee Business World for an article that explored sustainable business growth. I am honored to join respected colleagues to present growth from a marketing perspective. Read on to learn more:
WENATCHEE — Almost every business can grow in some way. But not every business grows in the same way.
That’s the overarching advice of local advisers to business owners and managers hoping to expand their enterprises by adding products or services, boosting their customer base or increasing public awareness of what their company does and how it does it.
“Get clear,” said Bert Holeton, founder and CEO of consulting firm The Mastermind Group. “Formulate your vision, assess your strengths and weaknesses, gauge the gap between your current reality and your vision.”
The gap “between current reality and your vision is filled with critical issues that need to be resolved,” he said. “Resolving the critical issues will tell you if you should grow and how you can best do it. But keep in mind, growth strategies for your own business will likely be very different from the business down the street.”
John McQuaig, Wenatchee business author and consultant, also warned that it’s great when profit margins suggest it’s time to grow — but don’t immediately jump on the expansion wagon without taking a good hard look at staff, finances, customers’ needs and wants and where your particular industry is headed.
“Take a breather,” said McQuaig. “Step back and reassess that your business ticks the boxes — or at least most of them — that signal you’re ready for growth. Expansion can be a tough process to navigate.”
Is expansion the right strategy?
Holeton and consulting partner Joel Frank of the Equilus Financial Group recommend that business owners use online assessment tools (questionnaires and surveys) to gauge if they’re ready personally and the business strategically for the rigors of growth and expansion.
“For example, a business owner could figure out that their vision is to withdraw from certain markets that are not as profitable — in effect, shrink the business — to have more focus on core customers, boost profitability and prepare the business for eventual sale or succession,” said Frank. “That kind of sale or succession strategy takes place frequently in North Central Washington, when longtime family businesses have hit some kind of succession barrier, and they feel it is time to put it on the market.”
But if expansion is the obvious path, said Holeton, owners need to consider five critical areas that could either thwart or fuel eventual growth — finances (how is your cash flow?), staff (do you have the right, competent people?), systems and process (how does the business function optimally?), IT (do you have the right, effective system for expansion?) and marketing and sales (are you satisfying the customers’ needs and must-haves?).
Staffing could be one of the most important aspects of a business’ growth strategy, said Frank. “When you get down to it,” he said, “business is all about people. Those businesses that grow successfully usually have the right people in the right places.”
McQuaig agreed. “When assessing, start with your business’ most important asset — your team,” he said. “Is your team the best it can be? Are you nurturing a team of dedicated, long-term team members invested in seeing the business flourish?”
A dedicated, well-trained staff is “the base of the pyramid of growth,” said McQuaig. “Your team must be solid before you stack on another layer.”
Where are you headed?
Author Jim Collins, who wrote the classic business book “Good to Great,” suggested that business leaders always “get the right people on the bus” when establishing or expanding their business.
“But unlike Collins’ quote” said Holeton, “I think the first step for a leader is to figure out where your bus is going, and why you’re going there — this is your vision.”
He recommended that business owners identify their “uniqueness” — those qualities that set them apart from competitors in their industry — and determine if those strengths (or weaknesses) fit with company’s core values and, in the end, dovetail with its vision for expansion.
In other words, “analyze your core differentiator in the current market,” said McQuaig. “This may now be different from when you started thinking about expanding last month or last year.”
McQuaig advised that owners and managers “stay ahead of the industry curve” by learning all they can about recent innovation and trends. “Attend seminars and workshops, watch webinars, scout the web for new trends and be the first in your industry to implement them.” Keeping up may keep staff on track as they determine the right growth strategies.
Jennifer Korfiatis, owner of the Wenatchee consulting firm Jennifer Korfiatis Marketing and a business teacher at Wenatchee Valley College, said the first question she asks clients before designing a new marketing campaign is if they can take on more work.
“Do you have the right team in place? Do you have the office space? Do you have the right technology?” she said. “You want more customers, but can you handle more customers? The worst thing is to take on all this new business and not be able to do the work.”
She also insists on a thorough review of current and target markets — who they are, what they’re buying, where they live, how much money they make.
Before a client invests in expansion, said Korfiatis, “we want to determine if they could sell something else to their existing customer base. Those people are already good customers, and they’re already fans of the product or service.”
Among new groups of customers, Korfiatis guides clients towards portions of the population that are unaware the business exists. “These are people who will have their eyes opened to the service you provide,” she said. “An introduction through marketing may be all they need to give you a call or place an order.”
Korfiatis said she warns clients about the commitment needed to keep an online presence fresh and immediate. “I tell them that they’ve created this living, breathing thing, and now it takes work,” she said, “with attention given to it everyday, maybe several times a day.”
Nowadays, she said, “when it comes to marketing, there is no one surefire way to reach everyone with your message. The golden egg is a blend of everything — newspapers, radio, websites, Facebook, Twitter, Instagram, Pinterest, you name it. It depends on your own preferences, what you can give time to, what you can afford, who you’re targeting with your message.”
Want some practical advice?
Holeton, Frank, McQuaig and Korfiatis offered some more practical points for moving ahead with expansion plans:
- Keep an eye on overhead. During a growth spurt, it’s easy to lose focus on ensuring that the overhead costs are in hand.
- Track profits. While an increase in sales is desirable, it can also come with unanticipated costs. Borrow money for long-term investment, not short-term cash flow.
- Retain your best customers. In reaching for new customers, businesses often forget about their longtime clients. “Remember that it is more profitable to sell to an existing client that to acquire a new one,” said McQuaig.
- Reward employees. Developing relationships with new clients will demand more time and support. Encourage and reward employees for their additional efforts.
In the end, said McQuaig, “consider growth to be like opening a second business — you will once again be strapped for cash and time, and you will once again need to put your nose to the grindstone.”
He added, “Be ready, take those measured risks and prepare for yet another exciting ride!”
Irwin, M. "How does your business grow? Advisers and owners talk about the roots of success." Wenatchee Business World, June, 2017. http://www.wenatcheeworld.com/news/2017/jun/05/how-does-your-business-grow-advisers-and-owners-talk-about-the-roots-of-success/