Growth is determined by method and potential, rather than led by market conditions. And in an SME it is above all, linked to the goals of the Owner/Manager: their ability to be forward-thinking and to make the growth of the company the No. 1 objective from which all else flows.
ANY SME IS CAPABLE OF GROWTH WHETHER ITS MARKET IS GROWING OR NOT
Such a statement could be seen as somewhat provocative at a time when significant parts of the economy have suffered – or are continuing to suffer – from a challenging economic situation.
And certainly, when running an SME it is extremely important to know your market. It is vital to have detailed knowledge of your customers, prospects and competitors. But that’s where the reference to the market should stop.
Unlike large groups that might serve 30% of a sector, and which are therefore directly impacted by significant market trends, SMEs have the advantage of being able to mostly avoid these effects. This is because they usually operate within product or geographical niches and generally have only a tiny market share. Thus they still have considerable scope for progress, as has been the case for many SMEs which show incredible growth when compared with the national statistical (average) for their business sectors.
Hence, the growth of an SME is a matter of potential and method, as opposed to market conditions. Unlike a large group, an SME can launch a major commercial offensive without eliciting reactions from market leaders. So winning a new customer or contract, following a proactive sales drive can often lead to a 10% growth of the company.
THE PRIME VEHICLE FOR SME GROWTH IS its manager’s AMBITION
« I’m too busy to think about developing the business ». How often have we heard this said by Owner/Managers overwhelmed by the everyday operational workload? All because no decisions about the business are made without them, and they do not have the time to properly manage.
The solution to this is to align their personal goals with those of the business. The Owner/Manager may prioritise getting a good income straightaway, or gamble on building long-term wealth. They may focus on selling the business completely within 5 years, a partial sale to their associates, or a transfer to one of their children. The individual responses to these questions will have a direct impact on strategy, the organisation, and the nature of their sales activity. But aligning the personal goals of the Owner/Manager with the corporate strategy will set the company on a sustainable road to growth. Managing a business by constantly firefighting is exhausting. You are far more motivated when meeting your personal goals.
IMAGINE YOUR COMPANY IN 5 YEARS
How can you increase your business size effectively if you can’t imagine it over time?
A company may well be experiencing growth and profiting from it but not necessarily have the funds to meet working capital requirements, so there is a risk that there won’t be sufficient capital to continue financing that growth. There are a number of solutions available to strengthen your capital base. Contrary to popular belief, financial engineering is a creative discipline, but you do have to anticipate the development of your business.
More generally, many Owner/Managers drawn in by the urgency of day-to-day activities, struggle to imagine their company in 5 years’ time, let alone formulate an organisational growth plan for that timeframe. There are numerous potential pitfalls that put them off: growth requires you to anticipate the organisational structure, the premises, equipment, recruitment and there is always the risk of going too fast or not fast enough.
be proactive rather than reactive
A recently published report summed it up: « The strength of SMEs is their ability to react, the weakness of SMEs is their reactivity ».
As they are smaller and more nimble than large corporations, they are rarely required to demonstrate the ability to react when a situation requires it. They could very easily change course, seize opportunities, revise their plans, yet more often than not, the status quo and inertia prevail.
It is time therefore, for the concept of « business agility » to reclaim its place.
An agile company is one that is capable of defining or rethinking its strategy by releasing itself – temporarily – from constraints. What would we do if we lived in a perfect world? What slows us down, hinders us, paralyses us? There is nothing quite like this type of agility to open the mind, to identify the slowness, the shackles, the bolts, before « returning to earth » with new priorities.
An agile company has the capacity to promote the autonomy and the creativity of each of its employees within the structure of a viable strategy. This is especially important in these times when the temptation to pull back is strong.
get going: AUTOMATE your sales plan
Once you’ve imagined the future and aligned your goals, you can then move on to translating these objectives into a strategy, and in particular a sales strategy.
However, too many SMEs are dependent on one major customer and do not regularly revisit their client portfolio. Their search for new clients is based only on their own experience and knowledge or left purely to the salesforce, if they have one…
An ongoing and systematic search for new clients will yield permanent results and better spread the risk, thus creating a sustainable path to growth. This is only possible if you define a strategy, create an action plan, automate processes and set performance indicators. It’s a difficult area, because you must keep to it in the long-term and not allow yourself to be distracted from your goal by the first operational challenge that hits you.
Growth therefore comes from a skilful combination of the goals of the Owner/Manager, their ability to think about the future, their anticipation of internal and external development, and the automation of processes for winning new clients.
Establishing such an approach is a long and difficult process, requiring both operational commitment and an ability to stand back and take a strategic view.
And that is why growth should never be left to chance.