Growing a business sounds amazing and exciting.
Getting more clients and needing to hire more people to make sure you deliver, moving to a bigger place to accommodate all your new personal and seeing your wealth grow.
But scaling a business might also be risky and scary.
Have you ever thought how Google, Apple or Facebook grew into such big companies? They didn’t start with thousands of employees or with a million dollar funding and now they are worth billions.
But they started small.
In the USA, 99.7% of businesses employ fewer than 500 people and only 6,000 employ more than 250 people. (Check sba.gov for more information)
So why do some businesses fail to grow when the idea is good and the implementation is solid?
It all comes to the owner’s Aspiration or lack of it. This is a key factor that will determine rather a business grows or not. If the owner is comfortable with the lifestyle and does not want to have the “trouble” that comes with expanding, the business will stay the same.
When you are not pursuing your goal, you are literally committing spiritual suicide.Less Brown
But there are others that have the aspiration but lack the financial status. Growth requires access to capital which might not be easy to get for smaller companies.
An Entrepreneur is a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.
Go grow your business right now, expand expand expand… is what some people tell you to do because that’s how big companies got to where they are now.
But is it the right time for you?
“Grow or die” thinking can lead to overinvesting and business failure. When the market is growing, the business mus grow as well, but it must be well planed and balanced.
One of the reasons new businesses fail is because they try to grow too fast. Growing will cost money, and if the company fails to attract more customers, it will start to lose money.
By getting new employees, products or services that cost you money, you have to make sure they will be producing enough revenue to cover their expenses plus a bonus. It needs to be worth the money invested.
If you hire someone to help you with a new client’s project, and after that project is finished you don’t have a place for that person you’ll eventually have to fire that person. You didn’t make that much profit and you didn’t grow your business.
As a manager or a business, your job is to balance income with expenses.
In 2001, Neil C. Churchill and John Mullins developed a formula to calculate the growth rate a company’s current operations can sustain called SFG (self-financeable growth rate).
This formula identifies three levers for managers to exploit the growth opportunity: speed up cash flow, reduce costs and raise prices.
This strategy will help you understand if it’s the right time for your business to grow and how to do it.
If you are not willing to risk you cannot grow. And if cannot grow you cannot become your best. And if cannot become your best you cannot be happy. And if you can’t be happy, what else is there?Les Brown
Now go study your business and try to understand where you’re at and where you want to be.
Let me know in the comments if you want to GROW to become the person you want to be and have the business you want to have.