Key Growth Strategies

Key Growth Strategies

 

Turning a small business into a big one is never easy. The statistics are grim. In other words, most businesses start small and stay there.

But if that's not good enough for you—or if you recognize that staying small doesn't necessarily guarantee your business's survival what follows are some options that can help you create a growth strategy of your own.

v Internal Growth

·       Market Penetration. This is the least risky option of selling more products to current customers. Find new ways for customers to use your products.

·       Market Development. Develop ways to sell product to an adjacent market by expanding to another city or province.

·       New Distribution Channel. You may expand by offering product on line.

·       Product Development. The classic growth strategy offers new products to existing and new customers.

v Integration

·       Horizontal. This strategy would involve buying a competitor. This not only adds to growth of your business but eliminates a competitor.

·       Backward. This involves buying a supplier and in addition to growth provides increased control of the supply chain.

·       Forward. If appropriate you could buy a component of your supply or distribution chain. This provides increased overall margin through profits at each level of product sales.

v Diversification

·       This involves growing the company by buying another company in a sector unrelated to your business. This can be risky and certainly requires an understanding of the new market place.

 

Growth strategies are never pursued in a vacuum, and a company needs to be willing to change course in response to feedback from the market. Too often, companies take a year to develop a strategy and, by the time they're ready to implement it, the market has changed on them.

The marketplace generally rewards those with agility, decisiveness and ability to capitalize when opportunities are presented.

 

 

 

Business Management

 Why not Hire the Best?

 

 

In many businesses the most important asset is the employees going through the doors every day. These individuals impact your business in many ways with their actions and decisions. As leader the owner controls one of the most important decisions for the organization and the hiring process can be critical to the overall success achieved.

Here are a few pointers to consider when hiring:

Ø  Develop a precise plan

Identify the key skills a candidate must have to succeed. Also define the important attitudes that enable the candidate to excel at the job. Stick to the plan.

Ø  Be diligent in selecting a candidate

A thorough interview process is important in choosing top candidates. This is particularly important with senior management positions. Take the time to test for qualifications; a vague, wandering conversation of informal questioning will at best be a hit and miss approach. Results will be equally inconsistent.

Ø  Share the Process

To improve results, involve others to gain a different perspective. Choose peers that the candidate would work with and perhaps even involve key customers if you enjoy their confidence. These contacts will bring additional insights into the personality and style of the candidate and add a point of view of the person’s ability to integrate into the organization.

 

 

The more perspectives you bring to the process the greater the chance of success in hiring great people in the organization.

Business Management

Guest blog

This week’s article is from Lora Crestan, Business Strategist + Coach for her own company – Lora Crestan who has kindly offered to provide some timely thoughts on refreshing your business.

Lora may be reached at: www.loracreston.com or 519.735.6820

 

 

 

Endings Need to Happen

I remember when I wrote my first business plan.  I had dreams of where I would be in 5 years, 10 years and even beyond.  I knew exactly what I was going to do, how I was going to do it, and who my client base would be.  Guess what?  Business plans are for flushing out ideas and rebuilding as your business develops.  BIG LESSON.

EVEN BIGGER LESSON, letting go of the ideas, projects and processes that really were going nowhere except to drain energy, resources and sometimes finances.  How do you, as a business leader, get to make these decisions?  These are the really tough ones.  In many organizations, this can apply to people as well as projects and processes.  Everything gets tougher when people are involved, either as the owners of the project or the ones that need to change.

What to do?

Here are a few things to start to build into your business:

1. Review your business plan quarterly and actively change what needs to be changed.  For example, if you are planning to launch a new product and the proto-types have not exceeded quality expectations, that date will have to change.
2. Plan and have open discussions about what or who needs to end.  In determining this, you will need to have frank and open conversations that look at the benefits to the company and people involved.  Be realistic about how many resources you are prepared to invest before you pull the plug – that includes time, people and money.
3. Learn to understand the life cycle of your business, it’s products and it’s people.  When you are developing plans to grow, what is the exit strategy or succession/evolution plan for each stream.

These may start you on your way to developing a more open understanding of endings that need to happen so that your business can continue to flourish.  Take your time and try them out.  Give us your feedback and thoughts....or if you stuck along the way, we are here to help!

 

Business Management

Benefits of Strategic Planning

 

 

Strategic Planning provides a number of benefits to an organization including:

Ø  An opportunity to clearly define the purpose of the organization

Ø  Establish achievable goals consistent with the mission and within a timeframe the organization can achieve.

Ø  A vehicle for communicating goals among employees and key customers

Ø  Provide a forum for employees to establish ownership of the plan and facilitate accountability.

Ø  Ensure the most effective use of the company’s resources.

Ø  Provide a vehicle to focus on key priorities.

Ø  Set a roadmap for future changes that will be needed.

 

The key to effective Strategic Planning is to implement the process and continue planning as the organization and external market environment changes. Certainly the plan will need annual reviews at a minimum to be an effective tool.

A Business Plan is used to define the “HOW” of implementation.

Business Management

Do you have strong cash management?

Poor management is the main reason for business failure and poor cash management is among the most frequent contributors to failures. Managers need to understand the basic concepts of cash flow and how to plan for unforeseen problems that are often faced in business.

Cash vs. cash flow

Cash is ready money in the bank or in the business. It is not inventory, accounts receivable, and it is not property. These can potentially be converted to cash, but can't be used to pay suppliers, rent, or employees.

Profit growth does not necessarily mean more cash on hand. Profit is the amount of money you make over a given period of time, while cash is what you must have on hand to keep your business running. Over time, a company's profits are of little value if they are not accompanied by positive net cash flow. You can't spend profit; you can only spend cash. Watching the cash inflows and outflows is one of the most pressing management tasks for any business.

Positive Cash Flow

If its cash inflow exceeds the outflow, a company has a positive cash flow. A positive cash flow is a good sign of financial health, but is by no means the only one.

Negative Cash Flow

If its cash outflow exceeds the inflow, a company has a negative cash flow. Reasons for negative cash flow include too much or obsolete inventory and poor collections on accounts receivable (what your customers owe you). If the company can't borrow additional cash at this point, it may be in serious trouble.

Practice Good Cash Flow Management

·       Good cash management is simple. It involves:

·       Knowing when, where, and how your cash needs will occur

·       Knowing the best sources for meeting additional cash needs

Being prepared to meet these needs when they occur, by keeping good relationships with bankers and other creditors

The starting point for good cash flow management is developing a cash flow projection. Smart business owners know how to develop both short-term (weekly, monthly) cash flow projections to help them manage daily cash, and long-term (annual, 3-5 year) cash flow projections to help them develop the necessary capital strategy to meet their business needs. They also prepare and use historical cash flow statements to understand how they used money in the past.

 

Business Branding

Great new Branding Tips

In this week’s blog I am happy to endorse a new book authored by one of my associates, Ed Roach,  a person for whom I have a great deal of respect in the Brand building business.

I recommend it to any business organization looking for a fresh approach to reviewing and renewing their brand.

Here is a brief version of the press release that provides a description of the book and a link to Ed’s web site for acquiring the book. You won’t be disappointed by taking the time to get a copy.

 

Branding Expert Releases New Book Containing Over 100 Branding Tips SMEs Can Use Right Now!

 

A new book, packed with straight forward no B.S. branding wisdom bundled to easily steer any business in a positive direction.

 

 “101 Branding Tips” offers a wealth of practical advice that small to medium size enterprises (SMEs) can immediately use in the branding of their business.

 

 “101 Branding Tips” is different in that is focuses its attention entirely on the small to medium size enterprises.

“It's hard to relate when you're a small business,” says Roach, who tries through his book, “101 Branding Tips” to deliver valuable advice that an SME can resonate with immediately.

“101 Branding Tips” hits your small business audience dead on.

 

 

“101 Branding Tips” is available at:  http://www.amazon.com/101-Branding-Tips-Practical-advice/dp/0988125005/ref=sr_1_6?ie=UTF8&qid=1344783268&sr=8-6&keywords=101+branding+tips

 

 

Business Management

Culture at its best

For many employees their job is more than a paycheck. In order to keep employees engaged and committed to success it is important for owners to focus on maintaining a positive work environment and culture. Here are techniques to consider:

1.     Empower employees

 As an owner, you can stay in close touch with your staff but you can't be in the thick of it all the time. Instead, you need to encourage employee involvement and be willing to step aside as they take control.

When employees drive the product direction and culture, they feel more vested in it and loyal to the products they help create.

2.     Limit Meetings

Use meetings as necessary but limit participation to those who are directly involved in the issue. Encourage more ad hoc discussions where employees are authorized to implement decisions.

Hold periodic broadly based meetings where all staff can join in and brief the entire company on their current activity. Treat staff to lunch at these broader based meetings.

3.     Make it comfortable

Physical space and comfortable, modern equipment in an attractive location are valuable assets to improve employee morale. These are assets when recruiting also.

4.     Make jobs fun

Take the opportunity to host monthly activities for employees to relax. Holiday parties, picnics, “fun Fridays” are common options used to provide downtime for employees and make them feel like part of the family. Providing break time improves staff’s ability to focus and improves overall productivity.

5.     Be selective

In order to maintain a positive culture be selective with every new hire. Ensure new employees fit and can become a positive team player and contributor. Bad apples can spoil the environment quickly.

As you continue to build and maintain your culture, efforts in these areas can pay dividends on a continuing basis.