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10
Tips to Prepare for
Sustainable Growth
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BY
GERI STENGEL
 ompanies
primed for growth lay the twin foundations of infrastructure
and knowledge, and avoid the pitfalls of undisciplined
growth that can dissipate quickly. They also know
that management adept at one level of business might
not be right for the next level, so bringing in
new blood may be necessary. Here are 10 ways to
help ensure that your company's growth is sustainable.
| Tip
#1: |
Tip
#1: Know your financials.
You
need to know when you're at break-even and what
the implications are when you're not. Can existing
cash flow carry you for the time being? Will
using your credit line be enough, or do you
need to raise money? Knowing the difference
between cash flow and profitability is critical.
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| Tip
#2: |
Know
your outside financing options.
Companies primed for growth know how, when and
where to get outside money and they know what
type of financing to tap. They understand the
benefits and the detriments of debt versus equity
financing. They know the appropriate financing
option at each point in the company's life cycle,
and they are versed in how companies are valued
and the impact of current trends on the ability
to raise money. |
| Tip
#3: |
Leverage
your core competencies. One key to growth
is to leverage your company's competitive advantage
by developing new products or going after new
markets. Deploying your abilities across geographic
and product business units will help your firm
achieve economies of scale and scope. |
| Tip
#4: |
Focus
externally, as well as internally. Tracking
your company's financials, operations, sales,
and marketing efforts is only half the story.
Comparing yourself to your competition and understanding
the impact of marketplace trends will give you
the rest. Compile a list of factors that are
important in your industry to determine the
metrics by which to measure your performance.
Since more information is available internally,
your internal performance metrics will be different
from your external performance metrics. |
| Tip
#5: |
Consider
non-organic ways in which you can grow. Acquisition
can be an ideal way to grow, but you need to
evaluate what type of company is a good fit
with yours. Be precise about how the target
company adds value to your enterprise and what
the necessary benchmarks are to capitalize value.
Make sure the acquisition target lines up with
your overall business strategy and available
capital. Keep in mind that there are other ways
of gaining a marketplace advantage, such as
teaming with another company and forming a joint
venture or strategic alliance. Relationships
such as these are easier to both implement and
end, should the need arise. |
| Tip
#6: |
Move
from micro-management to macro-management. Business
owners often have trouble letting go and turning
matters over to subordinates. But, it's critical
that you do so. No matter how good you are,
you simply don't have the expertise - or
the time - to do it all. Delegate responsibilities
and tasks to appropriate staff members. Communicate
critical and actionable information. Cross-pollinate
solutions or ideas among your staff. |
| Tip
#7: |
Make
strategic use of outside advisers. You
don't need to navigate unfamiliar waters alone.
Put together a good board of advisers, and you'll
create a powerful asset that can make a huge
difference when you need to get objective advice,
scout the marketplace, gauge future trends,
seek new strategic positions, have introductions
made, or build repeat customers. These individuals
can advise you, evaluate you, and even play
devil's advocate for you. You also should consult
your lawyer, accountant, banker, peers, and
others whose judgment you trust. |
| Tip
#8: |
Reap
the rewards of technology. You can improve
your business through access to timely, critical
information about performance. It's equally
important that you identify and seize technology
enabled opportunities that can help you reduce
costs and increase productivity. Use relationship-management
systems that integrate information to better
serve your customers, improve cash flow, and
promote cross-selling. Make sure your systems
can be integrated with each other and are both
scaleable and flexible. |
| Tip
#9: |
Protect
your intellectual property. Products, technologies,
business methods, patents, trademarks, copyrights,
and other forms of intellectual property can
significantly enhance a company's ability to
secure and defend sources of marketplace advantage,
even in times of rapid technological change.
Intellectual property is a means of creating
a proprietary, defensible market advantage.
Be sure to protect yours. |
| Tip
#10: |
Manage
risk through insurance. Just being in business
is risky. A fire could destroy your inventory,
records and building, a flood could cause thousands
of dollars' worth of damage…the list of potential
catastrophes businesses face is virtually endless.
Since you can't eliminate risk, you have to
manage it by insuring your company with general
liability and property coverage, an umbrella
policy, automobile insurance (if you own and
operate commercial vehicles), professional liability,
life insurance, workers' compensation, business
interruption insurance, and destroyed or damaged
records insurance. |
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GERI STENGEL is president of Stengel Solution (www.stengelsolutions.com),
a New York City-based strategic planning and marketing
firm specializing in solutions for industry leaders,
growth businesses, and nonprofits. She can be contacted
at 212-362-3088 (e-mail: geri@stengelsolutions.com). |
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Phone: (919) 362-1551 | Fax: (919) 362-9898
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