Create a road map for growth
The good news, Latour says, is that business owners can create a road map to guide them and reduce their risk as they grow their enterprise. The road map can help them find more growth opportunities and avoid common mistakes, like failing to delegate responsibility to employees.
Start by committing time to outlining a plan for your growth, Latour says. It should include the following important basics:
- A clear picture of your business's current strengths, weaknesses and opportunities.
- A vision for where you want your company to be in the next three to five years.
- An action plan to achieve your vision, including who will do what and by when.
Your growth plan could be anything from a rough, informal sketch to a full-blown, highly detailed strategic plan, including everything from a mission statement to scenario planning and financial forecasts.
What's vital is getting the key players in your company on the same page, thinking about your future.
Failing to plan is planning to fail
“If you're going to grow, you should absolutely have a plan,” says Paul Cubbon, who teaches entrepreneurship and innovation at the University of British Columbia's (UBC) Sauder School of Business. “Failing to plan is planning to fail.”
Latour agrees. “The plan doesn't have to be pages and pages long—sometimes the simpler, the better. But if you don't have a planned, disciplined approach to growth, you're probably going to make more mistakes.”
3 tips for growing a small business
You've decided you want to expand your small business—but aren't sure how. Here are some ideas to get you started.
1. Leverage existing clients
Looking for growth opportunities? Don't forget your existing clients. They could be your best path to expansion success. It's usually much easier to find new business from current clients than to start afresh with untested ones.
“Listen to existing clients, and see what they need,” says Patrick Latour. “Ask them how you can help them be even better. Can you help them in ways they don't know about?” Latour also advises growth-oriented entrepreneurs to seek out opportunities to join the supply chains of multinational corporations.
2. Protect your margins
Whatever you focus on as a growth opportunity, be sure it's the right path for you and your business, says Paul Cubbon from UBC.
Don't expand into new business areas just because you can. “People think growth will bring a more profitable situation. But they may grow from one to 20 employees and not make any more money, while working twice as hard,” Cubbon says. “It's not just about growth. It's about smart growth.” Be sure new business offers the same margins as you currently enjoy and helps you differentiate yourself from the competition.
3. Don't micromanage
Growing companies often wind up in trouble when the entrepreneur has trouble delegating decisions to staff. “Hire good people and trust them,” Latour says. “Let your people work, while you spend more time thinking about your strategic focus and your next move.”