The PCW Consulting Group Exec, along their respective journeys, whilst building their own companies from scratch or building companies for others, have gathered a wealth of knowledge and insight.
Whether our exec team were in start-ups, SMEs, or stock market listed PLC businesses, the business fundamentals were – and always will be – rather similar. It’s about ‘scaling up, without screwing up’.
Having overcome the enormous personal risks and challenges of starting a new business venture and surviving the crucial first two or three years, the owner’s attention inevitably turns towards potential growth, obtaining new business, exploring new markets, perhaps investigating new products or services, and expanding their customer base. With this next phase comes a new set of challenges, risks, and rewards to your business that you may not have experienced before in your career or personal life. The process is all-consuming. A founder or owner repeatedly feels that almost everything that they humanly possess lies at stake on the turn of the next card.
Going for growth and getting it right is the ultimate high and, once experienced, is the most superlative, incurable addiction. You will continue to seek out and replicate this feeling for the rest of your life, allowing it to lift and nourish every fibre of your being.
We have set out some of the big headline items to focus upon in your business plan as you formulate your growth strategy:
Stay on top of cash flow
The common business expression “turnover is vanity, profit is reality, and cash is sanity” still rings true – never forget it! Cash generation and cash generative clients will keep you focused and safe. Whether this is the result of under trading or over trading, getting the cash position wrong will not only destroy any hope of growth, but will have the potential to be the downfall of your business.
SMEs that fall prey to cash flow problems often say that they find it difficult to monitor. They don’t know how to rectify the situation when things are going wrong. At PCW, we can assist with your growth plan and we can also help you to establish a financial model, which can be as simple as a spreadsheet. This can enable you to test scenarios out and model the impact of too much growth, the implications of taking on that new potential contract, or simply the effects of not putting the right processes and infrastructure in place to help you and your colleagues to collect the cash that you’re owed.
Chase customer payments religiously
Getting paid on time is essential to keeping a business running, yet late payments still pose one of the biggest threats to businesses.
It sounds obvious, but it’s vital to have a complete overview of the finances of your business and liquidity at any given time. This will help you to keep on top of all your incomings and outgoings, providing insight on what money is available to use for investment or growth. This helps you to prepare for when payments are due, identifying consistent ‘late-payers’ who you may well end up jettisoning in the future as you grow anyway. Issuing interest penalties to these businesses, or even discounts for early payments, might encourage more funds to come in on time, but this is nothing compared to simply implementing a good process of slick invoicing, giving statements of account, telephone chasing, and giving overdue reminders and red letters.
Avoiding mistakes on invoices, such as billing the wrong group entity or the wrong person, using incorrect purchase order numbers, giving the wrong date, and yes, even making a spelling mistake, will also help prevent delays. These errors may not be spotted until just before payment becomes due, delaying it until the next payable cycle, and leaving a dent in your cash flow.
Monitor margin erosion as operating costs increase
A mistake that many small business owners make is to focus on measuring turnover instead of margin. This can fool them into thinking they are doing well, or even growing, as their turnover increases. However, as the business and its revenue streams grow, so too do the operating costs, and if these are increasing at a higher rate, the business is effectively going backwards – this is less profitable and less cash generative.
Business owners should be constantly looking to sustain those margins set down in stone in the Business Plan by taking advantage of discounts from suppliers, bulk purchasing, and competitive procurement processes. You should always be looking for more economical ways to manage overheads, considering necessary price point increases in your products and services rates.
Grow your business and your people
Business growth isn’t just about revenue or profit. Although these, and the cash they generate, pays for other important components of growth, what builds shareholder value if you get it right is building your team. Get your management team wrong and you could have the opposite of growth on your hands. Investing in the recruiting, training, and development of the best staff that you can possibly afford is key to the growth of their understanding of the business, as well as their engagement with it, both of which are key to boosting productivity innovation and growth.
Do your homework: identify the clients you need and build a sales funnel
The first way to quickly grow your business is by building a sales funnel. If you don’t have a sales funnel, you’re making a monumental mistake. Sales funnels can help you to scale and grow quickly, easily, and much more strategically.
There’s quite a bit of front-end work involved when it comes to researching and gathering data to enable you to set out your existing customers and your target customers, classify your Gold, Silver, and Bronze clients, etc. It’s a big piece of work but, once those processes are in place, it can help you be focused and priority driven, allowing you to drive your business in accordance with your plan, rather than in a diluted scatter-gun approach in order to bring in new sales just to drive monthly turnover numbers.
We are looking for those quality clients, in the right markets, who we can add value for within our capabilities. In the current market, aren’t they looking for quality people like us too, who can add to their value chain and deliver that special quality product or service? Yes! So do your homework and don’t waste your time chasing the wrong customers, and don’t exclusively chase Bronze clients. Stay focused!
Utilize a Customer Relationship Management (CRM) system
The manual tracking of data lists and transactions is hard. No one wants to do it and it gets too cumbersome as the business grows. If you want to scale up quickly, use a customer management system. Let’s face it, when working on building the funnel, prior to this stage, the adoption of a CRM system makes this exercise a lot easier.
A good CRM is a database that you can also use for your e-marketing campaigns, newsletters, and general company news and offers.
There are plenty to choose from, but you need to embed it intimately so it becomes not just a client list, but also a database of your clients, including notes about interactions with them, the latest market intelligence (good or bad), who saw them last and when, who they like to work with, their needs and requirements, etc. It will become an imperative tool for bidding at the right level and creating value. This “client book” is favourable in the event that an acquirer knocks on your door one day.
At PCW Consulting, we can help you with your bidding processes and help you to disrupt your marketplace in order to secure your market share.
Research the competition
Researching your competition is crucial before entering the market, launching a new product, or expanding your business. Identify gaps in the market for an easier entry or adapt existing products to fill those gaps. If competition is fierce, consider offering unique value to stand out. Strategic partnerships can be game-changers, reaching a wider customer base. Focus on your strengths and capabilities, targeting the right clients, markets, and cashflow. PCW Consulting Exec, with vast experience in both SMEs and corporations, can help drive organic growth and strategic acquisitions aligned with your business plan and objectives
Look after repeat customers
It costs up to three times more money to acquire new customers than it does to sell something to an existing customer. Other resources pin this number anywhere from four to 10 times more. However, any way that you slice it, acquiring new customers is expensive.
Doing great work or delivering great products is the fundamental building block to repeat business. Gary Player, a high-performing sportsman and, subsequently, an even higher performing businessman, said that “everything in business is negotiable, except quality”.
Building a customer loyalty program will help you retain customers and it might also help you to attract new ones as well. If there’s a clear incentive to spend more money with you then this will pay off in the long run. Build an attractive loyalty program and make it accessible to your existing customers and new ones, produce great quality work and products, and watch your sales really accelerate.
Leverage global platforms
Are you in the e-commerce business selling products? Why not use Amazon’s FBA service? Are you in the business of selling services? Why not use Upwork? Do you rent holiday homes? Why not leverage Airbnb, HomeAway, or other global platforms? Find a platform that’s reached maturity and use it to grow your business quickly.
Licensing deals and franchises
Doing licensing deals is a great way to grow your business without too much added effort. If you have a product that you can license to others and share a revenue of, then this is an ideal way to grow quickly. Taking a popular or successful product and bringing it to a company with a large footprint can help you to achieve market saturation quicker.
If you already have a successful business and you’re really looking to grow quickly, consider franchising it. Although franchise costs are high and moving to a franchise model is complex and takes a lot of marketing know-how, it could make all the difference if you’re truly looking for quick growth.
Diversify your products or services
Look into diversifying your offers. What complementary products or services or information can you offer in your business? In order to grow, you need to think about expansion. Identify new opportunities within your niche. Uncover the pinch points. What else can you sell to your clients? Where else can you add value?
You need to think about investment costs or R&D expenses here. Think about how this could negatively detract from current core products or services. Don’t let the boredom of doing your core things well distract you from inventing new products or services. You need to protect your reputation, your quality, your team, and your cash. Diversification into areas that are yet unproven or untested worries customers – no-one wants to stake their job on agreeing to let you test your new whizzy product on their live business. Proving your concept and getting the product into the market can eat your cash, take your business in the wrong direction, or unravel the culture and success that you have created. This can be as dangerous as having created the wrong management team. Get it right – it’s an absolute game changer.
We can help with all the above and have turned a few blackjack cards over ourselves. We have learned what ‘good’ looks like and can share these lessons learned too.
Acquire other businesses
Sometimes acquiring other businesses is a very quick way to grow your own business. If you can find competitors or businesses in other industries or other products or service lines that would complement your own, you could use them as platforms to scale up fast. Take a look within your industry and even outside of it to find potential opportunities.
We can help you get ready and raise the capital you need to make deals. We can also support the whole deal-making process, from the tactics through to approaching the target.
International expansion
Perhaps with Coronavirus, this is not the right time to get into exports or expansion into overseas territories.
Ask yourself if you can you expand further afield? Can you take your existing products, services, and niches and scale them up internationally? Can you manage the tax, compliance, and recruitment costs? What would it take to do business in EMEA or APAC? Which territory is easiest for you? If you have a converting offer, international expansion could be a quick way to grow. You’ll incur some costs, sure, but the potential for profits could be massive.
Going digital
Going digital is, quite possibly, the biggest subject area. We’ve saved it for last but will cover it in another insight paper sometime soon.
Most things can be digitised and made more efficient. Your new products and services could well be a digital version of what the market currently does or is grappling to do. This impacts upon every aspect of sales, marketing, finance, compliance, HR, IT, operations, contracts, quality, and so on. We are now able to do much more with less people and, with more AI intuitive solutions being made available, we encourage you, before you presume on any capital investment, to ask whether it can be automated or digitised entirely or in part to reduce capital expenditure and/or hasten results.
We, at PCW Consulting Group, have grown everything from start-ups to PLCs. Our Exec are ready to share their knowledge with you and get straight to the catalysts for your successful growth, putting checks and balances in place to give you the protective governance that you need to help you fulfil your ambitions and achieve the success you deserve.
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