Whether your business is large or small, new or seasoned, growth is often a very exciting prospect. It can also be risky and rewarding. Through my years of experience—from starting my career at Ernst & Young to being CEO of a company that found success through sound and rapid growth—I discovered a pattern when it comes to growing a business. No matter the company type or size, there are fundamental principles that can be applied to find success in growth. Check out these nine practical and actionable steps that can be applied to any business.

1. Define what you want to grow

Growth means different things to different people. In order to successfully achieve the growth that you desire, you have to first be clear about what you want to grow. Here are some examples of growth objectives:

  • Increase revenue: Your focus is to show higher topline numbers for reasons that may include better valuation of your company or better supplier relationships.
  • Improve profits: This may sound like it’s consistent with more revenue, but sometimes to generate more revenue you need to spend more money, which reduces your profits.
  • Boost cash flow: If cash flow is your goal, you may decide to slow things down. It takes cash investment to build out your operations and team, so you can slow down the pace to acheive increased cash flow.
  • Reduce losses: Although you may use the term growth, you may not yet be in the position to bring profits to your bottom line. Therefore, your goal could be to first reduce the number of losses you’re experiencing.
  • Duplicate wins: It may be that your business is already proving to be lucrative, and you want to do more of what’s working.

It’s critical to take the time to define your growth objective because it determines your destination. Without knowing where you want to go, you run the risk of never getting anywhere. Take your time to be clear as to what growth means to you and your business. Having your ultimate destination in mind will help you create a path to getting there.

2. Know your numbers

One of most common shortcomings of small to medium businesses is in the managements’ lack of understanding of the numbers. Not everyone is born to be an accountant, but every business owner needs to understand how their business makes money. This means that you must become a student of your financials. Even in my role as a CEO of a sizable company, I knew that I had to understand the factors that went into the company’s income statement. 

It’s like a recipe with the correct ingredients, precise measurements, and detailed steps for baking a delicious cake—every part of the recipe is important for the best outcome. You need to understand how each revenue line item is created and how each cost is incurred. If your skill set doesn’t include a great understanding of your financial statements, consult with someone who can help you understand it very well. Take the time to get comfortable with your financial statements and learn exactly how money is made in your business.

3. Understand how you earn sales

As you learn your financials, you should also focus on understanding how your business earns sales. No matter what business you’re in, you’re selling something. You may be selling products or services or a combination of the two, but in the end, you’re selling something. There are two major ingredients in earning sales: creating interest and closing sales. 

Creating interest

Generating interest in your business’ offerings (goods or services) is what first exposes you to your target audience. This could mean that you put time and effort toward digital marketing, mailers, referrals, advertising, etc. To increase generated interest, you should monitor and measure the success of each of these programs. The goal of your marketing efforts is to increase exposure and generate higher conversion of customers. 

Once you determine the ways to create exposure and measure how they’ve performed, you can identify the efficiency and effectiveness of your efforts. This cycle can be simple or complex, depending on your business’ needs and your marketing efforts. Many business owners often have a general understanding of the effectiveness of their marketing and exposure efforts but may not be as closely observant of how efficient they are.

Closing sales

A successful business not only requires you to generate interest from potential clients, but it also requires you to turn these prospects into actual customers by closing sales. The management team must be involved and have a keen understanding of the best sales techniques and closing efforts. Circumstances can also change over time, so a successful business must adjust and pivot those tactics as needed. 

At its core, your business needs to generate sales. As a business owner or executive, you must understand how sales are generated and the many factors that go into it. This means a good understanding of your exposure and marketing efforts as well as the sales cycle specific to your organization.

4. Identify growth levers

Now that you’ve defined what growth means to you, learned what makes you money, and understand what goes into your sales, you’re ready to identify what you can change. These are the growth levers which you can pull and adjust to help you reach your growth objectives. 

Make a list of growth levers that you can realistically impact. It’s great to think big about what can be improved, but be sure these improvements are practical and possible for you. You may understand that there are things that would be great to change, but they may not happen in the near future. Focus on what you can control, and be realistic about how much and when. Create a list with specific numbers and timelines to determine clear objectives. Here are a few growth lever examples:

  • Increase closed sales by 10% a month: Having identified opportunities in your sales process, maybe you’ve learned that with better training, improved tools, or more targeted  follow up, it’s possible to improve sales by an incremental 10% every month.
  • Increase upsells by 10% a month: When you look at how you earn sales, you may have figured out that your staff isn’t suggesting higher-end products as often as they should to your customers. Perhaps with better training or bundling, it’s possible to upsell to higher-priced items an incremental 10% a month.
  • Buy smarter in three months: By becoming a student of your financials, you may have learned that you can buy products at better discounts and terms. To implement this, realistically it could take three or more months. 
  • Improve digital marketing efforts by 5%: Perhaps between understanding how you earn sales and understanding the costs associated with your marketing, you’ve found out that you can reduce your marketing spend without any detriment to your sales (increasing efficiency) by 5% for the next month.
  • Reduce overtime: Looking at the costs of running your business, you may have identified a lot of overtime. With better training and hours, it could take you a few months to reduce overtime. 

These are just some examples to help you understand how best to identify your growth levers. As detailed, growth levers should have a positive impact toward your growth objectives. They must be realistic and tangible, and they must be executable over a realistic timeline. Once you create the list of these growth levers, you can design an actionable roadmap toward your goals.

5. Create a roadmap

The practical, realistic, and actionable growth levers in your list can now be used to create your roadmap to growth. To start, take your income statement, and based on your own list of growth levers, add in your projections for the coming months.

For example, if you are looking to increase closed sales by 10% and boost upsells by 10%, write directly on your income statement what the new numbers would look like if those tasks were completed. This will give you a visual roadmap of what you and your team would have to produce in the way of sales every month.

The beauty of these building blocks is that in the process of creating your growth levers, you would have already identified the ways to execute on these particular sales improvements: better training, tools, and follow up.

What’s even more helpful is that as you create timelines for each of the growth levers identified, a picture emerges that shows how multiple incremental improvements can add up to larger overall improvement and growth.

You may choose to use the same projections every month to create your roadmap, however you can also experiment to find out what works best for your business. Just be sure to give each test enough time to work—success doesn’t come overnight. As long as you clearly identify your growth levers and plan around executing on them over time, you have an effective roadmap.

6. Fix shortcomings

One of the best advantages of creating and documenting a roadmap is that it allows you to identify where there may be some shortcomings. Shortcomings can be found anywhere within an organization—they could be in the efficiency of your teams or the adequacy of your employees. You may realize that there are specialties or functions that are missing in your organization which keep you from executing on your plans. However, remember that discovering shortcomings isn’t bad news because what you face, you can fix.

One of the challenges that most successful people face is that because they’re very good at something, they expect to be good at everything—and no one is. So it would benefit you and your company to be honest about what is not being addressed adequately and solve for those holes in your expertise. You might even need to hire new employees or retain consultants to help you fill those gaps. For instance, if this process showed you that you need someone with  superior accounting knowledge, you can retain a CPA for monthly services. Of course, you would have to consider the cost of doing this, but given a chance to plan, you can.

7. Communicate with everyone

Your growth journey is not a solo journey. You need others to execute and assist on your growth plan. Your employees, suppliers, partners, and even family are critical for this success. All these groups need to be informed of the plans for your organization so that everyone understands where the business is headed. It’s through clear communication that they know how their individual roles and functions help support the big picture. Being a part of the overall growth plan and aware of the objectives of growth will inspire these groups to creatively and collaboratively help the entire organization move toward its well-defined goals. Consistent communication helps everyone travel in the same direction. Of course, communication isn’t done just one time, and it definitely shouldn’t be one way. Effective communication requires frequent nurturing and updating as well as discussing and hearing feedback so that everyone can add value and excel.

8. Execute on the roadmap

Falling back into old habits is a fault that plagues even the largest companies and experienced business owners. Although good analysis, energy, and intent all contribute to creating a growth plan, if your focus is distracted, you may find yourself doing things the same way as before, and your forward movement will be stunted. Progress requires consistent commitment. If you truly want growth in your business, you must make sure you and your entire team take the action steps identified in your roadmap. A periodic check-in—whether its weekly or monthly—is a useful reminder for everyone to track their own growth. There are rarely any silver bullets; growth comes from incremental, well-thought-out, and consistently applied action steps. Over time, small improvements add up to giant leaps.

9. Measure and readjust

Planning is essential, but plans often become obsolete. To evaluate if you’re on the right track, you have to review your successes frequently. At least once a month, take some time to measure your growth against your plans. This is an exercise in identifying hurdles and setbacks so that you can address them on a timely basis and before you’ve gone too long down the wrong path. It’s also a chance to understand what’s gone well so that you can repeat good practices. Based on what you learn during these monthly check-ins (or whenever you measure results against your planned goals), you should revisit your roadmap and ask if there are adjustments to be made. Adjustments are necessary to ensure you stay on course toward your successful growth.

You’re on your way!

Growth can mean many things, but following these nine fundamentals can ensure that you achieve the type of growth that you want. If you choose to embark on this journey of growing your business, you must be clear where your destination is. You need to know your numbers and the ways you earn money and sales. As you identify where you can make realistic improvements, you’re able to create a natural and executable roadmap to your growth goals. Your roadmap is best executed if everyone on your team is aware and engaged and if any shortcomings are faced and fixed. Your on-going commitment to executing on your plans requires periodic reviews to see if you’re tracking appropriately and if you have to adjust your plans. 

Ultimately, a committed, well-designed, and measured growth plan executed by engaged and well-designed teams can bring exciting new growth to your business. The good news is that you don’t have to take giant leaps or do it all at once. Focusing on incremental, practical, and actionable steps will create substantial and sustained new growth over time.

Leave a Reply

Your email address will not be published.