In our first insight series on the four stages of business we looked at the start up stage. This time we look at three key things to focus on during the growth stage of a business.
- Strategy
- Risk
- Solvency
Adopt a Director mindset in the growth stage of business
The key to growing your business is adapting a Director mindset. It is time to start working more on the business rather than in the business.
1. Set your business growth strategy
There are three elements to an effective business growth strategy. Enlist the help and expertise of a business advisor and your staff members to develop the strategy. Share it with your team so everyone is clear on the business goals and priority tasks. Failing to do this can reduce staff buy in.
Clarity is key to a successful business growth strategy
Don’t make the mistake of trying to achieve too many things. Get clear on the essential actions to drive growth. Delegate accountability for implementing actions to others so everything doesn’t fall back on to you. When a task is everyone’s job, it often doesn’t get done.
Set measurable key performance indicators (KPIs).
Your strategy and action plan must have timeframes and KPIs. Have KPIs for financial and non-financial aspects of the business. Make them easy to measure and, ideally, able to be benchmarked against others in your industry.
Think big and be aggressive.
Take a longer-term view and challenge yourself. Business owners often don’t set themselves lofty enough goals. They overestimate what they can achieve in 12 months but underestimate what they can achieve in five years.
How will you grow? It largely comes down to either organic growth or mergers and acquisitions or combination of both.
2. Managing risk when growing your business
There is more risk in the growth phase of a business because it is not yet in maturity. Focus on these three areas of risk.
Legal and financial risks in a business growth phase
If you are developing intellectual property you may need to think about patents or other legal protections. Make sure all your contracts are watertight too. Review the adequacy of your business insurances (such as product liability, professional indemnity, stock and equipment, and building) to minimise insurance risk.
Talent management risks during business growth
In the business growth phase attracting and retaining the right people is key. One issue to consider is when you grow competitors start to notice your team and poach staff.
Your administration needs will grow too. Don’t let important aspects of your business such as stock control, payroll and bookkeeping divert your focus from working on the business. You can recruit an admin manager or team or consider outsourcing to professional contractors.
Tech risks during the business growth stage
When your business is growing, tech and automation can help bring efficiencies. Your susceptibility to outages and cyber-attacks is magnified compared to the start up phase. Make sure your IT provider can handle the needs of a larger business and has the experience to guide you.
3. Solvency
As your business grows, keep an eye on cashflow. Ensure mergers and acquisitions don’t drain the business of cashflow.
The rigour and robustness of your financial reporting and budgeting will increase too. Think about having external audits of your financial information and business operations. Benchmarking against competitors and businesses in other sectors as well as executive benchmarking can help to evaluate your business performance and business strategy.
The right advice when your business is in the growth stage
No matter what which stage your business is in, our team of business advisors, accountants and wealth managers can be with you every step of the way.
Pitcher Partners Newcastle and Hunter is a full service firm. We offer services to support the business growth issues I have covered including business strategy, audit services, benchmarking, business support services, business accounting and taxation advice.
We provide large and small businesses in a range of industries with clarity and assurance to meet your business goals. Whether you are a sole trader, partnership or company. With our help, you can be certain your business structures meet your growth goals.
Few business strategy and service providers boast our team’s depth of expertise and our ability to integrate it with business and personal accounting and taxation services and private wealth management services. We are proactive, easy to talk to and customise our advice. No matter the scale of your operations, we provide leading and accredited business advice.
Got a question about growing your business?
We love questions. If you want to know more about Pitcher Partners Newcastle and Hunter’s business advisory services, please contact us.
Scott Edden is a Partner at Pitcher Partners Newcastle and Hunter. Scott’s breadth of experience spans taxation advice and assistance, financial analysis, business valuation advice, management reporting, budgeting and cashflow management.
