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8 Steps to Successful Organized Business Growth
Imagine you have joined a play. The crowd is engrossed, everything is going according to the plan and it is time for your cue.
A company growth is very much similar to a play. You have to plan and then execute according to what your company needs. However, you also have to take into account your team and the pros and cons of the action you will take.
Unfortunately, unlike the play where you rehearse your moves multiple times, your business will not always give you a chance to rehearse your actions. You have to plan and execute and rely on your years of experience of taking that action.
Many people do not believe this, but companies are most often crushed by their own growth. A boom in your business can make you take numerous commitments at once. All of this requires a proper plan, financing and huge cash flow.
Unprepared growth can be a company murderer. To help you have a controlled growth, here are 8 steps to a successful organized business growth.
Step 1. Reduce unnecessary expenses
To have a controlled growth, the first thing you need to do is to reduce the number of expenses you have. Your team should understand that there are only two routes to increased profitability; increased sales and reduction in expenses. You need both for a controlled growth.
The easiest way to reduce your expenses is to cut off any employee not needed for your core business.
Step 2. Be translucent with your team
I know what you are thinking. You do not think you can do that with your team. But the fact is that your entire team must know all the information about your business. This includes financials.
How can one expect that the team goes on a journey without them knowing where you are taking them or how will they get there. They do not even know what you are going to do. Simply telling them about all the information regarding your business including the financials will solve this problem. As a safety precaution, you can tell this information must stay inside this company and will put their job in jeopardy. Update and share the information regularly to make sure everyone is on the same page. Be clear about where you stand on your business forecast compared to your actuals as well.
Step 3. Start with a 90 Day Plan
You should make this step a regular habit. Start with a 90 day plan. You can break it down into month and then weeks, outlining who is going to do what and what are their tasks.
You need to lay out a base of your projected goals and growth comparing your business with the previous 90 days.
Learn more about the lean planning. Try not spending too much time on planning as you will not be right on the first time. It will take you a few tries to get better at planning. You and your team will take time to get better each week as you make corrections.
Step 4. Do regular Accounting
Most businesses go by the rule of making yearly financial statements or making monthly ones and comparing them to previous year’s performance. Financial statements – income statement, balance sheet and cash flow statement – are a picture of the whole company. Where is stands, how is it operating and if it got better or worse from the previous year. Although useful, this method tells us where we have been, not where we are going.
For this step, you need a way of updating your accounts daily. This will let you track your financials easily. They will show you where you stand every single day and by making financial accounts every day, you can recognize a problem within 24 hours and correct it instead of waiting a month.
Step 5. Keep a track and share your metrics daily
Only you and your team can take decisions. For this, you need clear goals and metrics. Try using whiteboards to measure metrics daily.
These whiteboards should be place at a place where the entire company can see them every day. These boards will help your team know where you are against your plan.
Step 6. Necessitate that all spending go through a proper purchase order process
Using a proper purchase order process is another way to be translucent that helps in maintaining a balanced cash flow and keeps everyone else in a loop with all the process.
Growth can become scary and it can be fatal to the company, therefore the whole company should know what purchases are being made to adjust the cash flow accordingly.
Step 7. Give Bonuses instead of increments
Try and give quarterly or annual bonuses. With bonuses, you already know that the money is in the bank and the amount of profit made. However, with raises, you are simply increasing your overheads and not taking into account the time when your revenue drops.
Step 8. Say NO to Accounts Receivables
Try to get food on credit from any drive thru and see how much food you get. They do not do credit and neither should you.
If you think you cannot operate without credit then be prepared to be crushed as delayed receivables will destroy your cash flow.
The trick here is to have more accounts payables as compared to accounts receivables.
The 8 steps mentioned in this article will make sure you have a controlled growth. Follow them and you can grow your business without much financing. Steady and sound growth is the growth that lasts the longest in terms of businesses and startups. Use these steps to set a foundation for your business and strengthen your business.
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