Many entrepreneurs believe that their business will grow organically, and that the necessary resources can simply be added to match current demand. This is a misconception says Christo Botes, spokesperson for the 2016 Entrepreneur of the Year competition.
He explains that once a business has grown to a certain size, the owner must consciously choose to scale up rather than simply reacting to a growing market share.
When facing this cross road, Botes says that the entrepreneur should execute these 5 strategies to achieve the growth they want.
1. Know why you want to scale and prepare. “Businesses often want to scale up to become self-sustainable, but starting this process without the necessary preparation and research can be detrimental for a business, as growing too fast can backfire.”
2. Perfect your processes and measures. “Upscaling a business is a lengthy procedure that involves complex introspection at almost every level. Business owners should be cautioned against the temptation to grow too quickly, and should aim rather to grow sustainably to ensure that the business continues to be a viable operation. As part of this sustainable growth there should also be a good balance between the management of regular operations and the expansion.”
3. Start thinking like a scale-up CEO. “Small business owners need to stop thinking and acting like a small business, but rather as a medium-size business and be cognisant of the fact that forward planning and measures – from anticipated turnover and management structure, number of jobs that can potentially be created and improving business processes – will need to be addressed in order to achieve the business results needed to run and maintain a larger scale business.
Planning for revenue growth is a good example of the necessary forward planning that needs to be considered, as growing revenue by 10% is considerably easier when you have an annual revenue of R10 million in comparison to turnover of R30 million.”
4. Carefully assess your execution strategy. “While a brilliant product or service offering can increase competitiveness and grow market share and revenue, a clear and achievable execution strategy will ensure ongoing success. A business owner will need to deliver on his/her intent of taking the business from a small operation to a mid-sized business.”
5. Don’t forget cashflow. “The business owner must have a clear idea of cash flow and have accurate forecasts in place. With growth and expansion, larger volumes of money and transactions will need to be closely managed.”
6. Return to the original vision of the business. “Having a clear vision in mind makes internal and external changes less distracting from the broader business goals,” concludes Botes.