For business owners, leading a company to the next level can be one of the most exciting, and most frightening, steps of their career. The feeling is similar to the decision one must make between clinging to a life raft or jumping in and swimming to a treasure island. Business owners must decide to either have their business stay flat, or dive in with both feet to expand their company to the next tier and reap the rewards.
When to Know it's Time to Jump
Customers: Look at your clients first when deciding whether or not to expand your business. Are your customers continuously being put on hold for over a minute? If so, you have more customers than the staff required, and you need to hire additional employees to deal with the rising demand.
Orders: Look at your own manufacturing or your suppliers. Is there a growing backlog of orders? Sourcing or manufacturing can't keep up with demand, and this hurts customer service.
Location: Have you recognized the potential of opening a new location for your small business, but can't expand? You're losing business — and money — because you lack the working capital needed to expand and invest in facilities and equipment.
How to Go for It
Before diving in, there are steps business owners can take to make the transition smoother. Moving into the next level requires a considerable amount of thought and preparation. Here are some steps to ease the stress:
"Â Survey your customers. Ask what clients like about your company. Find out what they perceive to be unique about your product or service. This needs to be preserved during growth.
"Â Survey your employees. Expanding into a new tier of business is a great time to fix the things you may not have paid attention to when you got started. Startups require broad overviews; expansions allow you to be more detail-oriented.
"Â Finance your growth. The growth strategies of most companies fail due to a lack of clear financial planning. Budget what your expansion is likely to cost, then add 50% to your estimate, and secure funding for that number.
"Â Include others in your growth plan. Involve various stakeholders, like employees, suppliers, partners, and customers in the expansion to ensure everyone is happy with the end result.
These steps are critical in preserving a business's success. Even after their implementation, however, companies may still suffer from growing pains. If this happens, remember that nothing succeeds like earnestness and transparency. Apologize to customers and prove you care about them, even as you grow.
Life after Taking the Plunge
Remember to constantly look for ways to set your business apart as you grow. This positions your company for future growth. When you started the business, you had an ideal in mind. Many companies mistakenly grow away from core values. Stay true to your ideal during expansion; it's what attracted your customers, and it's what keeps you motivated.
Don't forget about your early customers. These are your most loyal clients who want you to succeed and grow. Implement customer loyalty programs to reward their early adopter status, and make them proud for sticking by your side.
Don't be afraid to adapt or try new things, according to whatever the new situation dictates. Never get too big that you are afraid to admit when you're wrong. Look at the new Coke and Tropicana packaging incidents. Tropicana launched new packaging that they were sure would be a hit with customers. The packaging didn't go over well, and it was rescinded after customers started a campaign to remove it. Coca-Cola changed the formulation of Coke to taste more like Pepsi, and customers didn't like it. They demanded their old Coke back. So the company brought back the old formulation and called it Coke Classic. Customers love when you listen and modify your business around their insights.
As a small business owner, you want success and profit. You may feel safe on that life raft with steady revenues. However, remember that with the rest of the market growing around you, if you're not advancing: you're falling behind. The true test exists when the opportunity for expansion comes around. So take a deep breath, prepare, and take the plunge.
Dush Ramachandran is Business Tranformation Coach for The Net Momentum. He has built, grown and sold two of his own companies and most recently served at Vice President of Sales and Business Development at ClickBank where he was instrumental in growing the company's revenues nearly 500% in five years. Dush is the host of the 'Entrepreneur Effect' radio show and is the author of an upcoming book on entrepreneurial success.