High Growth Business – What’s Important
I work as a self-employed high growth business coach on the Government’s GrowthAccelerator programme and I am currently working with approximately 30 companies at the moment and have worked with over 300 companies in the past.
For the purposes of this article, a high growth company is one that is growing year on year at 20% or more. In my experience, this rate of growth can be achieved organically without further injections of capital.
There is no silver bullet to growing a high growth company, at the end of the day it’s about efficiently making small improvements in all areas over time to make the business more effective.
These are the 16 aspects of high growth business:
- dynamic leadership
- competent team
- high personal productivity
- attractive market
- scalable business model
- well designed product/ service
- systematic marketing
- dynamic sales
- great customer service
- safe and lean processes
- effective IT
- cost control
- cashflow management
- access to finance
- business performance measurement
- continuous improvement
What does this mean in more detail?
Dynamic Leadership: High growth businesses need leadership. You need to have a clear vision of what you want to achieve. You may or may not know how to achieve that vision but you should know and be able to articulate what you want to achieve. The “how” of “doing it” is generally done by your team whether they are direct employees, contractors or suppliers. You need to make sure that they have had the right training, experience and resources for them to be successful.
Competent Team: From working with many companies the thing that sets high growth businesses apart from the rest is down to the people. Follow best practice when hiring people as it can be a real challenge getting rid of mediocre performers as it is these people in key positions that can really put the brakes on the growth of your business. Click here to find out how to improve employee-employer relationships.
High Personal Productivity: You and your team have a lot to do. Make sure everybody is trained in how to be productive. Make sure you and your team are working on tasks that move you to your objectives.
The underlying philosophy of leaders of high growth companies is that they have a “do it now” attitude. They simply get on with the job and only do those tasks that move them towards their goals. Procrastination is the enemy of high growth.
Attractive Market: An attractive market is one which is growing, doesn’t have low-cost corner-cutting competitors and that you can profitably service. For smaller companies, this often means finding a niche or attacking the smaller end of a far larger market that the larger players cannot service or have simply ignored.
Scalable Business Model: You have identified an opportunity. You now need to build a business model that takes advantage of the opportunity that allows you to grow your business by simply adding more people and resources to fulfil that opportunity.
A good way of thinking of this is to build the business as though you are going to franchise it.
Well Designed Product/Service: New entrants often come into a long-established market and are successful because they have come in with a new pair of eyes. The world may have subtlety changed over the years and the existing players have continued to do what they have always done (because that’s safe, right?). Somebody new coming in and looking from the changed perspective can often identify a new way of working that is attractive and takes customers away from the existing players.
Systematic Marketing: High growth companies take a systematic approach to their marketing. For smaller companies, this may be low key but it is about using a limited budget effectively.
Good marketing is not so much about having a great brand, although that helps, it is about good, consistent two-way communication with your customers. It is as much about listening and engaging as it is about sending out your marketing messages.
Dynamic Sales: No matter what size company you are, you need to be able to sell. Some markets require intensive telesales approaches, others it just requires somebody with excellent product knowledge, a passion for what they do and to be able to ask for the order. Look at ways that customers can help themselves, they often prefer it as they are in control.
Great Customer Service: Great customer service is about listening to your customers and reacting to their requests, concerns and ideas. It is very much about getting the detail right. Follow your customers’ journey through your business. How easy is it to do business with you? As technology develops, so does the way we’re expected to deliver customer service and recent shifts are both important and here to stay. To find out more, read this article on how to improve customer satisfaction using technology.
Safe & Lean Processes: Lean manufacturing has a concept of “value-added”. This is used to describe processes that move a customer’s order forward. Waiting for something to happen is called “non-value added” or waste and needs to be eliminated. A lot of people concentrate on reducing the costs of doing value-added operations. However, if you analyse a process whether you are a service or product based company you will find only 25% is spent actually adding value, the rest of the time is waste. Working on eliminating waste will have a far greater impact on improving customer service, costs and ultimately your profits.
Effective IT: Information Technology (IT) plays an increasing role in allowing companies to do more with less staff. Technology has changed everything and the highest growth businesses are heavily dependent on IT in order to capture customer details right at the start of the process; to the extent with web-based systems that the customer does all the work.
Cost Control: Keeping control of costs is critical whether you are a start-up or large company. Too much money is wasted on failed projects, poor procurement practices, poor debtor and creditor management and lack of regular accounting information. Whatever it takes to keep on top of the numbers.
Cashflow Management: High growth businesses consume cash. This is because as you grow, what you are owed grows (i.e. your debtors). This is because most businesses have to pay for people and goods before they get paid. This means that although you may be profitable your working capital consumes the cash that was your profit. However, you also need your retained profits to fund new investment. That’s why high growth companies simply go bust because the growth has consumed all the cash.
Access To finance: Access to finance is currently a real challenge for most companies. Finding finance to fund working capital, new equipment and new products and services is harder now than it has ever been. There are ways to get funding, you just need to search harder and think laterally.
Business Performance Measurement: What gets measured gets done. Measuring what you do is critical to your success, otherwise, how do you know you are going to achieve your objectives? Essentially you need to find key performance measures that are critical to the success of your business. These will be financial and non-financial indicators that include key metrics about customers, your internal processes including operations or production, the usual financial indicators and indicators on training and product or service development.
Continuous Improvement: In today’s global economy, doing nothing is no longer an option.
You and your team are on a journey in a high growth business. As you grow, your organisation has to learn and grow. It is not simply about adding more people. Processes have to be reviewed on a regular basis, new skills need to be constantly embedded and new products and services developed as social, technological, political, economic and environmental factors affect your market place.
Future posts will take an in-depth look into each of these areas.
We can help you achieve your dreams for high growth business. For more information, go to: High Growth Business Coach
