There are several points in the development of a growing business when slowed growth is predictable if not inevitable, no matter what is going on in the general economy. Its people can work harder and the business will not grow. What should you do if you suspect that your business has hit one of these “growth walls?” Here are four “wall-breaking” steps for today’s entrepreneur:
- Make sure you are defining the problem correctly. You may not have a growth problem. You may have developed a profitability problem. Check to see if improvements are paying off. People who work in growth-oriented companies learn a lot as they provide services and products for customers. Hopefully, you are getting better at what you do everyday. Ironically, that improvement can be a source of stunted growth for the business. Check if customers know and want what’s being done for them. Check for “creep”: Customer expectations could have been creeping up while your price and projected number of billable hours have remained the same. Timesheets become very important at this point. Make sure employees, including you, are recording how long it takes to do tasks so estimates and profitability can improve. Remember, profitability is the fuel of sustained growth.
- Make sure your business is busy with work that is directly related to customers. Managing a growing business can be very demanding and distracting. It is surprisingly easy for people to get caught up in computer systems, associations, designing reports or long meetings. These things happen when the work with customers is undervalued or has become frustrating in some way. Often “creeping” customer expectations push service providers into “improvement projects,” which is reflected in “creeping” administrative hours and reduced profitability. Take a closer look at behavior. Caring employees may unknowingly be avoiding conflict or tackling complex problems that are related to customers.
- Look for what’s right about your business. When you feel like you are spinning your wheels or are trapped, it’s too easy to focus on the negative. You must have been doing something to attract enough business to be as busy as you are.
- If you are in a market that has good growth potential, are profitable, are not distracted, have faced creeping expectations and haven’t been avoiding core customer-related issues, then you need to consider the possibility that you have played out yesterday’s premise(s) and should change how your business operates. One of the first times an owner of a small service business hits a “growth wall” is when he/she discovers that there are only 24 hours in a day. There’s a point when revenues and/or customer satisfactions will be adversely affected if he/she spends more time on marketing and sales, but the growth of the business will be stifled if it’s not done. Typically, there is not enough money to hire an experienced person to help with the billable work or sales and there is not enough time to train an experienced person. How do the “Four Wall-Breaking Steps” apply here?
Checking profitability and “creep,” the owner may discover that clients are still paying one hourly rate as though all of the work being done for them is at the same level. It may be time to identify work that could be done by someone with less experience than the owner. The client is then asked to pay a lower rate for work that can be delegated and a higher rate for work that must be done by the owner. The client benefits from the efforts of two people, and the company reduces its over-dependence on the owner.
A look at distractions and avoidance may reveal that the business owner has unknowingly become bored with the work she/he is doing for clients. Or customers may want something the business owner doesn’t want to do. Procrastination, avoidance and inefficiency may have crept into the day-to-day
Routine. Again, bringing on an assistant to do some of the billable work that the owner does not need to do is important.
A look at what’s right may reveal some core concepts that can be conveyed to potential customers in a more efficient matter. A successful marketing program usually generates better qualified leads that in turn reduce the amount of sales time needed to get each new account, and the clearer the message, the easier it is to bring on salespeople. Remember, good salespeople do not cost money; they make money.
Now revisit long-term goals. They may have shifted. If the owner still wants an “incorporated career,” growth of the business can come in the form of increased billing rates, more challenging projects, travel or a diversified client base, but if the business owner doesn’t like the firm’s dependence on his/her doing so much billable work, it may be time to consider a change to “President/CEO.”