Growing your small business
“A lot of businesses fail while pursuing potentially good ideas because they take on opportunities that lead them away from their goals,” notes André Menand, Director of Entrepreneurial Experience Development at the École des Entrepreneurs du Québec. The takeaway? Smart growth management is essential.
Focus on business development
Often resources or financial means are limited, which is why it can be so hard to expand. “To grow, you need to find opportunities that are profitable in terms of both time and money, that you can assign to other members of your team and monitor with relative ease,” says Menand. In other words, you need to find your cash cow!
This could be a lucrative contract for a regular client that keeps your business humming along without increasing your workload. The idea is to free up some time and money which can then be spent on business development. About 10 years ago, Menand developed the Growth Wheel, a growth model for small- and medium-sized businesses. “The wheel identifies the various steps that most companies take in order to grow. There are four different phases, each with its own challenges.”
Phase 1: penetrating the market
“The first is market penetration—generating as many sales as possible to keep your company alive and pay yourself,” says Menand.
At this point, it’s important to measure and analyze the sales of products and/or services, and assess the consumer’s level of satisfaction in order to adjust the strategy if the established objectives are not met.
Phase 2: becoming profitable
The second step to managing your business growth is making your sales count: being more selective and concentrating on the most profitable clients and products. At the same time, you need to structure your business and optimize your process in order to reduce costs and increase your profit margin.
For more information, read the full article on National Bank website.