What are the characteristics of a growth business compared to a small business? Many people start up their business to meet a market need and are happy to keep operating it in a manner that suits their lifestyle or enables them to have flexibility. What they don’t recognise is if they focused on certain areas of their business, they could be preparing their business for growth and a potential future exit plan.
Use the checklist below to assess if your business is a growth business:
- Strategy/Direction – Has your business identified long term goals and a strategy to take it towards these goals?
- Organisation structure – Does it have defined roles, reporting relationships and accountability?
- Culture – Have you identified the values and attitudes that symbolise the culture of your business?
- Systems and Procedures – Are there documented systems that clarify work processes?
- Leadership – Is the business owner more focused on strategy than day to day management?
- Employment and HR Practices – Do good HR practices exist that support business performance?
- Product/Service Development – Do you make improvements to product/service using feedback taken from customers?
- Customer Relationship Management – Does a formal system exist for managing customer data?
- International competition – Does the business recognises that it is in an international environment by how it operates?
Once you have identified where the gaps are, then you can prepare a plan to address these areas. The reasons why these areas are important are below.
Characteristics of a Growth Business
Strategy & Direction
Everyone in a business needs to know where the business is heading in order to provide inspiration and bring a consistent focus for employees. Clarity and simplcity is key to success. I was not inspired to join my first polar expedition team because they decided to “go somewhere cold” but because they wanted to get to the North Pole. The One Page Business Plan philosophy can help you to set your direction.
Regardess of the size of the business, it is vital to know who is responsible for what activity and how they are going to be held accountable for delivering results.
This is the “how things work around here” and its pretty easy to assess a culture of a business by sitting in reception and observing how people address one another, or having some type of interaction with the business. Recently the ownership of our local gym changed hands, and the culture immediately changed to a more positive one, becuase of the way the new owners behaved towards their staff. It was evident in how the receptionists smiled more, and their increased willingness to help clients.
Systems and Procedures
Often in the enthusiasm of business start-up, entrepreneurs love to make things happen, and don’t bother writing down how they do it. But if you want to create a business that is scalable, this area needs careful attention. Whilst you might perceive it as a cost and time consuming exercise early on, I strongly suggest its a wise investment.
Every business needs a leader. But not every leader likes leading, as some get more satisfaction from the “doing” i.e. delivering the product or service. I always encourage business leaders to work out what their strengths and interests are using a tool like Birkman, so that they can be honest with themselves. It can be hard to let go of the “doing” of day-to-day operations, and become more strategic, but remember – a business is only a great business if it can run without you.
Employment and HR Practices
As a business grows, it will need people, so having professional employment practices helps an entrepreneur save time and money. It can be costly to go to a tribunal if proper procedures have not been followed. Also, for most service businesses it is the people that is their most valuable asset, so they need to be treated accordingly.
Product or Service Development
You will get the best intelligence about your product or service from your customers, so make sure you have a formal way of collecting the data. Margaret Ramsdale, founder of Omega Uniform Systems, was able to develop a completely new venture Jexa, when she discovered that the technology they had created to manage uniform systems and provided to clients free of charge, was of great value to corporates who used multiple vendors.
Customer Relationship Management
A simple system to manage your customer data will add value to your business. When I sold the training business I had founded, the CRM system was a key part of the value identified by the purchaser. Even using Mailchimp can get you started.
Whilst your business may currently only operate in one geographical area, its important to pay attention to the global perspective. Anyone who has a website has the potential to have global clients, so make sure you are aware of trends in other places. It also means you could be first to bring them to your regional marketplace.