Planning your Growth
Do you want to develop your business? Are you in the middle phase of growing your business and handling transition and change?
If so, the CMC Partnership explain how they can provide hands on support to the owner manager.
For many owner managers, one of the most important decisions they have to make is to decide whether to grow their business to become a ‘medium sized venture’, or whether to maintain their company as a ‘small, manageable business’. The decision is complex because so many issues have to be considered: from finance, sales and marketing, to business planning, day to day management and organisation, along with key people in the business, and so on.
Success can only be achieved if there is a simple, clear plan on the way forward. Whether this is formal or informal, the owner manager needs to prioritise the long checklist of actions to keep the whole organisation moving forward. A significant weakness in one or more areas can have a dramatic impact on a growing company, draining money, resources and energy.
The Starting Point – Personal Objectives
The starting point of growing a privately owned business is to determine the personal objectives and views of the owner/managers. If the business is to grow the crucial question is why?
- To increase its value in order to be sold?
- Is money not a key issue?
- Simply because it has to grow in order to survive?
- Because the success of the company is an important objective for the owners?
- Growth is organic and no conscious decision has been made?
- To relieve the total dependency on the owner/managers?
- In order to allow the owners to delegate some or all of the day-to-day management?
The personal objectives will have a major impact on how the growth is managed, how business risks are viewed and what investment is appropriate. Clear personal objectives, agreed at the beginning will help the management team to make appropriate decisions.
Planning for Growth
Once the Personal Objectives have been established, the next stage is to build a practical plan.
The Plan for Growth, like any good plan, is a statement of intentions and should not be ‘written in stone’. There are too many variables to know exactly how the process will evolve. But a good plan will allow for the known variables to be taken into account and a list of wants or needs to be noted. A good plan will anticipate potential barriers that may threaten the profitable growth of the company.
The following is a typical sequence for the Plan for Growth:
1. Set up an ‘Annual Business Cycle’
- Includes the Business Plan
- Based on the financial year
- The road map for action in each year
2.Focus on the key people
- Retention
- Development
3. Consider the databases
- Sales/marketing
- Product/service
- Development
4.Develop the people
- 2nd tier management team
- People
- Very much on the job
5. Plug the gaps in the systems and processes
- Balance between expenditure v return
- Guide the new culture and leadership
6. Vision/Communication
- Handle misunderstandings
7. Focus on the blockages
- Known issues/ Unknown issues as they emerge
- Monitor against the owners’ personal objectives
Obviously the Plan for Growth will be unique for each company but it must also react to unknown issues, good and bad, which will suddenly affect the business. For example, you need to have contingency plans in place should a key person leave or become available; should a key contract get won or lost; or should the exchange rate move unexpectedly, and so on.
“Be prepared” should be your motto, not only at the start of your business, but as you grow your business to suit your objectives and fulfil your ambitions for it.
Managing the Changes and Transition
The day-to-day actions will be different for each company but the absolute priority for all companies is to create profitable growth. All too often growth can occur with no return on the bottom line. The management process must therefore enhance the overall value of the business.
With a Plan for Growth in place typical questions include:
- Is the business plan identifying clear accountabilities for key people?
- Is the organisation structure suited to the growth underway?
- Are the roles and responsibilities in the developing organisation clear?
- Are the systems and processes handling the changes needed for a growing company?
- Is the company culture moving with the changes?
- Is the financing of the business appropriate?
- Are the management information systems and accounting systems moving forward with the changes underway?
- Are the Directors, Managers and People developing with the changes in the business?
- Do key people have the incentive to achieve their goals?
- Are people generally motivated and supporting the changes underway? To motivate your team, book a place on the Business Pioneer Programme or Management and Leadership Workshop Series. (Link to Step 4 Training and Support)
- Are the communication channels appropriate allowing clear leadership and handling misunderstandings effectively?
- Are the views of clients/customers clear or is a survey needed?
Stay ahead of the rest with the leadership coaching support of our Business Pioneer Coaching Programme.
Expert Advice by CMC Partnership
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