Scaling up from a cafe-dwelling enterprise, run from your laptop, to an office with more than one chair is a big and exciting step. But like all giant leaps, it requires forethought.
It is crucial to focus on how – and why – you are going to do it. In other words, you need a growth strategy. You will require tenacity and courage in large volumes too, but a plan is essential.
“As is often the case, simple is better,” says Isla Wilson, founder of business growth consultancy Ruby Star Associates. “I’d rarely recommend a lengthy or wordy strategy document. It might even be as simple as something you can scribble on a whiteboard.”
What is important, says Wilson, is that it’s clear. “Growth comes from a better understanding of capacity, so it helps to be clear where the growth is going to come from.”
Questions you should ask to determine your growth strategy include:
- Are we turning away orders?
- If we are, what changes would allow us to accept those orders?
- Is there work we aren’t pursuing, which we think we could do, because of our capacity?
- Is there pressure in the system?
- Are we too busy some months but have spare capacity at other times?
- Can we do more to smooth this out?
The obvious step might be to recruit additional staff for sales or marketing and drive growth from there. Who can resist the thought of writing their first recruitment ad?
But this can be an expensive mistake if you have issues with value, price, reputation or quality. Your floristry business may have a devastatingly funny Twitter account, but it is no good if your lilies wilt.
Identifying opportunities for growth is a useful first step. It is crucial to be realistic about what is achievable. “It is usually least risky to grow your business in the areas you understand best,” says Wilson.
Growth is not just about doing more of what you do. It might be doing what you do, but better. If your lilies are wilting, perhaps your growth comes from varying suppliers or updating your premises. Or maybe your lilies are fragrant but your social media strategy stinks.
Consider whether your current team is productive and whether you are paying the right prices for the tasks people are performing. A good example of this, says Wilson, is where senior or highly-paid employees find themselves doing data entry or other admin as part of their role. “This can often be completed by someone on a lower salary more accurately, more effectively and at less cost.”
Testing is key
Think of your idea as a growth hypothesis rather than a growth strategy. “While with some ideas you will be able to research [them] first, with lots of ideas the most effective way to test it is with a small-scale experiment,” she says.
Start with a hypothesis, says Wilson: “For example, ‘My hypothesis is that if we had someone who took the lead on all of our digital and social marketing this would increase our online sales’.
“Then work out how to measure it – using metrics on what made people come to your website – and at the end of the experiment work out what the new role costs you and how much additional profit it brings in.”
Such experiments can be useful when discussing growth with an existing staff member or business partner.
Wilson says: “Understanding that this is an experiment and that permanent changes will be based on the outcome can help secure buy-in. Consider freelancers for things like this so as not to make permanent changes too soon.”
Getting bigger is exhilarating but it is important to be ready to expand. Growth marketing consultant Angie Schottmuller, in the book, The Growth Strategy That’s Being Ignored, warns: “It’s easy to scare off key stakeholders with too much change – new processes, new terminology, new tools, new risks, new skill requirements, new budgets and new ways of thinking.”
She advises only introducing changes, “when the team is ready and you’re prepared to collaboratively guide, equip and support them.”
Wilson agrees: “Prioritise which changes to try based on an analysis of the potential opportunities and risks, but remember also to take account of the risks of doing nothing.”
Key points
- Keep it simple: can you write your growth strategy on the back of a napkin? Great.
- Will getting bigger help growth or do you need to focus on getting better first?
- Get your test tubes out. Experiment until you know what will work for your company.
- Introduce the changes only when everyone else is on board.
Content on this page is paid for and provided by Hiscox, sponsor of the Adventures in Business hub on the Guardian Small Business Network.
