Beyond business Growth. what happens next?
All businesses, large and small, come to me to fix a very specific business problem:
They need, or would like more customers.
Whenever I’m consulting with a new client, I always find that the following question is the most telling about where they are on their business journey:
‘How many new customers do you want?’
Usually, particularly in buinsesses that have not hit a major growth stage, the answer is:
‘As many as possible!’ Usually with a smile which suggests I’m batty for even asking.
When you’re struggling with customers and getting enough money to get business going, it may seem like a silly question. But larger, more established businesses usually have an answer that might look more like:
‘We’d like to take over 2% of the market away from [COMPETITOR]’
Or ‘We currently book out space enough for 1000 and we currently take 500, so we could comfortably double the business.’
I’m not judging, when I had been in business for a couple of years and reliably started to bring in customers I was asked on a sales call ‘how many customers do you actually want? I only ask because another freelancer I spoke to said she can only take on a certain amount of clients to be able to comfortably service them all.’
It was a wise question, but I gave an uninformed answer: ‘As many as possible! If I bring in more customers than I can cope with, then I’ll hire someone else to help me, and I’ll build up an agency that way.’
I could have in fact, done that. I could be sat on one of Sheffield’s bigger agencies if I had actually taken on board all the customers I was attracting. But I haven’t. It’s not as simple as 28 year old me anticipated.
Growing a business is a whole other challenge in itself. And growth can easily shut down a business. Growth can ruin your quality of life and sanity. Or worse, mean a lot of people who are dependent on you don’t get paid.
I learned recently that one of the largest corporations in the world have an entire team dedicated to strategise over the question: ‘What if everyone in the world starts buying this product, like, everyday?’ Trust that if one of the worlds biggest FMCG’s believe that rapid growth could kill their business, a steady growth plan should be something you at least consider.
The issue with growth plans is, you can plan for how you’ll personally feel about owning 10 cafes when you already own one. But it will be even harder to guess how you’ll feel about owning 100 when you own one. As we grow as entrepreneurs, we learn information about ourselves and the world that isn’t really out there in the general population. We can’t just ask our Dad (most of the time) ‘So what’s it like to employ 1,000 people then, is it worth doing, or should I stick at owning a boutique business?’ Some people will want to stop at 100, some people will want to become the next Starbucks. You don’t really know until you’re in the position to actually make that decision.
Furthermore, most of the information that’s out there for entrepreneurs is about how to get started and get earning money for yourself. A great feeling. There aren’t many self help books out there that will teach you how to comfortably manage a large business. Mostly because, there aren’t that many people out there who already do that.
I didn’t personally know how I would feel about working for ‘big names’ until I actually started doing it. When I did, I realised that it isn’t that much different from working with smaller businesses. And while the contracts might be bigger, the pay isn’t necessarily better.
So here are a few things that I think you should consider, before you start your marketing plan, about your growth plan. I’m a big fan as journaling for self reflection and improvement and so feel free to save these for later and work on them in your notebook.
- How much money do I need to support my desired lifestyle in the next 3 years? (We can’t really make 10 year plans in the entrepreneur world!)
- How many extra customers would I need to support this increase in cash?
- How much money does my business need to comfortably tick over? (Take into consideration your staff wages, expenses, etc)
Once you have established this figure consider some other questions…
- If I raise my businesses income by raising prices, what does that mean for my business?
- If I raise my businesses income by increasing the amount of customers we serve, what does that mean for my business?
- If I have to hire additional staff, how can I make sure I can do this quickly to support work demand? Is there a talent pool available and ready? Do I need to make my workplace more attractive in order to compete? Does anything about my work culture need to change?
- How many customers can I process at each stage of my sales pipeline?
- Increased custom means increased support demand – how can the business support this?
- What would happen if we suddenly increased custom but there was a high number of cancellations and refunds? I say this after watching a talk with a beer subscription company, he secured investment to attract a high number of customers. In transit, the bottles all broke due to a packaging error, meaning that he had to repost about half of the orders. He ended up needing to seek additional money to cope with this.
- If you get an increase in custom and make changes to support this, what’s your plan for if this custom disappears? For example, you’re an agency who secures two large design clients. You bring on two new staff members to work on this account and others. What happens if this client cancels? Do you have a plan for quickly replacing the client and have the funds to tide over this persons wage in the mean time, or do you make them redundant? Can you afford either?
Then think about some logistics…
- Working with bigger clients, on bigger projects, in a bigger team. Are your staff able to deal with that? Do they need training? Do you need to prepare yourself for bringing in a person who has significant experience working on bigger things?
- Do you need to take a step back from your business? Do you need to hand over some work and delegate (that can be a mental challenge for many people). Do you need to take a step back from being a team member on the shop floor, and establish yourself in a different position?
- Does your work culture support working with a wider variety of people? Maybe your workplace before had a small team of recruiters, but with growth you now have a financial controller, admin, marketing and PA. What needs to change? It’s not your responsibility to ensure that these people all get along, but it is your responsibility to ensure that nobody is being bullied, harassed or abused. These things are more common than you might imagine and can be a symptom of a workplace that has had a structural adaptation without a cultural adaptation.
- Have you properly accounted for everything in your growth plan – i.e a bigger office, increases in software costs, insurance and HR expenses.
- Are you somebody who can cope with the pressure of having X amount of clients or staff. Many people decide to keep their business boutique, or sell for millions to a corporation who will take over the stress. Is there anything you can do in your own personal life to help you manage stress better?
Once you’ve taken everything into consideration, how does it all add up? It may be that your growth plan involves selling the business at a key moment. Or you may realise that you are essentially capped by your location (you’ll need to understand what that cap actually is). For example, it may be difficult to hire enough engineers in a city without a great university, so you either accept this, increase wages significantly, or move location.
Eventually you will peak, and customer acquisition is not the main way you earn your dough anymore. Maybe it’s a case of expanding your offering to the customers you already have and providing better services. You may need to attract a new type of customer. For example, you may have peaked with the amount of large businesses you can attract, and decide to design packages for a smaller type of business.
Planning for all considerations is impossible, of course, as we have learned from the coronavirus pandemic. However, it really is best to fully understand what the next step is for your business before you work on a campaign to acquire as many new customers as possible. Planning for your growth and deciding where to take your business is not negative thinking. In fact, it’s understanding the sky is the limit and understanding that your business really can provide you with the lifestyle that you desire, whether that be a small boutique or a multinational corporation.