Every business owner has a big vision for their company and wants to make it happen. But, most business owners don’t follow a unified strategy to reach their business goals and struggle to know where to begin. It’s like trying to bake a cake without a recipe. You add a dash of this and a pinch of that hoping that it will become a cake in the end.
But hope is not a strategy and pretty soon, you’re frustrated that’s it not happening. It shouldn’t be so hard to grow a business others aspire to become. If you’re looking to grow your business, here are the top 5 areas you should be paying attention to:
Make sure you have the right people on your team and that they’re in the right seat (job). If you’re looking to fill vacancies, it’s important to remember that your best prospects for employment are your competitor’s best people, but the reverse is also true.
Second, for someone to play on your team, it’s not enough to be effective or efficient, you need both. An effective employee will produce what you want and an efficient employee will produce maximum output while minimizing wasted time or money. That combination of both is what makes an employee great. Employees who are either ineffective or inefficient will usually lengthen cycle times in your sales, production, delivery and payment cycles or make mistakes or create redundancies that will either cost you time or money or both.
Are your processes in writing? If not, you’re leaving yourself open to interpretation of those processes by your people. Without training for your workforce, new and existing, it’s likely that these processes will be done the way the employee thinks they should be done or the way it was done at prior firms where your people have worked. This can create mistakes in your processes, which will take time to correct, causing inefficiencies in time and money. The sum total of all this can have a significant impact on your ability to scale.
If your business is the car, marketing is the accelerator. Marketing is one of the most crucial areas to be sure you have a set strategy for how to reach your goals. Having spent 43 years in business, I’ve found “people don’t care how much you know until they know how much you care.” Relationships first means people have to get know each other, and then like each other, before they’ll try the product or service. People hate to be sold, but they do love to have their problems solved. Having a marketing strategy that reaches your clients in this way is crucial.
Unless your business is totally automated with robotics, your business plan will be executed by people. To help your business grow fast, execution has to be effective (doing the right things) and efficient (doing things right). That effectiveness and efficiency has to be focused on shortening cycle times (going faster), eliminating mistakes, and improving your business model. There are 3 factors in your business that drive this: having the right people in the right seats, having great leaders with vision, and engaging in competitive learning for your organization.
It’s important to look at your cash flow statement each month, not just your balance sheet and income statement. There are 3 things that cause cash to go up or down and are reflected on your cash flow statement:
Operating Activities- How much was sold and collected, and how much expense was incurred that was paid for by cash (not credit), will tell you how much cash was attributed to operating activities.
Investing Activities– Did you buy any equipment, real estate, or vehicles? All of these are included in investing activities. This amount is deducted from the cash generated by operations.
Financing Activities– Did you borrow or pay back any loans? Also, did you declare any dividends and contribute additional capital?
You can’t manage what you don’t measure, so start using your cash flow statement to understand where your cash is going and what to do about it.
While growing your business can seem overwhelming, starting with a focus on these 5 areas will help you get on the right track.