Growing pains aren’t only for kids. There comes a time in every young business when you’re too busy to handle everything with your existing resources, but can’t quite afford to bring in additional ones – whether they are human, financial or operational. It’s at this point that so many startups flounder, because unless you have enough cash to throw at the problem, there’s no obvious way around it.
That’s when strategic planning comes into its own, and here are 4 steps to developing a strategy to prepare you for growth:
Step 1: Set Long-Term Objectives
By setting explicit, realistic long-term objectives, you pave the way for the development of a portfolio of clients that complement your company goals. Through following your plan closely, you can make every decision and activity count towards growing the business at a comfortable rate. Unless you know what that rate is, you could make the mistake of being over-ambitious and stretch your capabilities too thinly. For example, don’t go after that large tender if you aren’t 100% sure you’re ready to execute it. There’s always going to be another opportunity to get a big contract, but there won’t be another chance to save your reputation if you fail at it.
Step 2: Compile a Growth Strategy
Once you know what you want to achieve and by when, it’s time to develop your growth strategy. Define the key criteria required to achieve your objectives in accordance with the timing you identified. These could include:
- the political climate
- specific industry developments
- the regulatory environment
- the maturity of your core competencies
- competitive advantage
- financial stability
To do this, you’ll need to set benchmarks against which you can measure your progress so that you can determine at any point exactly how well you are performing against the strategy and the timeline.
Step 3: Identify Needed Resources
Strategic, controlled growth takes the existence of certain critical resources. For example, you may need to achieve a certain level of core competencies before you can go after particular types of business. Successful growth demands that you have the right people with the right talents in place before you secure the work they have to do. So figure out what staff and equipment you will need to take on new work, and don’t commit to it unless and until you have those in place.
Step 4: Establish Flexible Financing
Growth seldom occurs without the money to finance it, and few young businesses keep ready cash lying around. In many cases, bidding for a large contract can require you to prove that you have the necessary funds to carry out the work. Don’t wait until you are busy with the bid process to arrange to finance because chances are good you won’t get the answer in time to submit your proposal. Establish a flexible financing option well in advance of needing it, and don’t access it unnecessarily—not even to achieve a positive cash flow in your company.
If you’re considering how to build up your business in a manageable fashion, let us help you formulate a comprehensive growth strategy that you can work with.
