Many business owners want to expand their companies but don’t know where to start or how to get there. Should you focus on What about product innovation?? Hiring a stellar team?
Recently, Axial, a large network that connects business owners with investors, asked Brendan Anderson, co-founder and managing partner of Evolution Capital, to speak about how you can grow your business.
Anderson’s company specializes in helping businesses scale their organizations through consulting and capital. Through his experience, Anderson has found that the following five pillars provide a foundation for growth:
These are also illustrated in a graphic below.
Graphic courtesy of evolutioncp.com.
You’ll notice that Anderson’s key to successfully scaling a business starts with financial documents. As a business owner, you need to have a daily dashboard with your cash flow. With this tool, there should be no surprises at the end of the month.
Besides avoiding shocks when you receive your monthly bank statement, you can also share these numbers with your staff to improve performance.
Somemight not feel comfortable sharing everything with their staff. But that’s not what Anderson recommends.
“Start small … If you start small and people fully understand what those numbers mean, people will start asking for more and you’ll get excited about sharing more and more,” he said. “The key is to start and pick some things that you think will influence the behavior for the people responsible, and it grows from there.”
For example, you can share dailyor labor efficiencies. These metrics, also known as key performance indicators, allow staff members to see how their work is directly affecting the company’s goals.
Other notes on this critical pillar from Anderson:
- Know your costs – customer acquisition, production, etc. Hire a cost accountant if necessary.
- Review the numbers quarterly.
- Never stop your search for better numbers – constantly tweak your key metrics.
One last important tidbit: Few businesses have tidy financial documents, which Anderson stressed. If you’re hoping to sell your company one day, you will be ahead of your competition if you have already have solid financials on hand.
To grow your business, you must create a plan. Can you expand without one? Sometimes, but hiring top talent and sustainable growth requires organization.
Your plan needs to have a goal. The document can have a singular goal of being debt-free or increasing profitability, but you must craft a plan that outlines how you’re going to get there.
Your plan will also outline the key performance indicators you need to keep an eye on, as well as break down your mammoth task into smaller steps. Just like the financials, you’ll want to revisit this at quarterly intervals to track your progress and make adjustments.
Two important pieces of advice from Anderson:
- Share your goal and strategy with your team. Listen to their feedback and “question the plan.” Don’t create it in your bubble without input and expect everyone to like it as well as follow it. You need buy-in from your staff.
- Just get started. Improving your company will never be complete, which can be overwhelming. However, you can begin today by doing something small such as scheduling a meeting with your colleagues to discuss which goal you should pursue.
Anderson recommends hiring using core values when you grow your business. What does your company stand for? Make it public and hire based on that criteria.
On the flip side, what don’t you want your company to be? Creating a list of your non-negotiables will also help prevent a bad hire.
Worried about not being able to find the experts you need?
Anderson emphasized this mantra in the webinar:
“With great financials and a detailed plan, you will be able to attract people that would not normally be interested in joining a small business.”
Think about it. Could you be enticed to join an exciting new venture with an owner that has a good grasp on the numbers and plan to get to a certain destination? I could. Organization and vision are attractive qualities to potential candidates.
In your quest to gain experienced, intelligent reach out to others and search for people who have been there before.,
Other options: create an advisory board or a joint venture.
We already addressed this with the financial pillar. Anderson is a big believer in transparency because it includes everyone in the process.
By sharing information with your staff, Anderson’s has learned you can get fantastic results – more enthusiasm from employees and innovation, which can result in faster growth or surpassing goals.
Share your company’s vision, purpose, and values. Then, make sure you follow them.
Again, start small and then share more as you see fit.
Keys of this pillar that will help you grow your business:
- Always know the key performance indicators.
- Hold yourself accountable by having an independent person “keep the scorecard.” This can be an office manager or co-worker that will hold you to the plan.
- Share progress with your staff and hold them accountable for their assignments.
Make sure that you stick to the plan and follow through.
“If you’re not holding yourself accountable, all of this is wasted,” Anderson said.
Have you noticed that growing businesses focus on these five things? Would you add another pillar to this mix to grow your business?