Planning for Growth
By Kurt Hahlbeck, Sandy Friess and Robin Lutz of Wipfli, LLC
Planning for growth includes knowing yourself, as well as, where you want to go and why. Many companies realize that to prosper in the coming decade, they need to turn to the fundamental issue of strategy. What is strategy? Strategy is “Where do you want to go?” and “How do you want to get there?” Most people want less work, more money and aren't sure how to get there. Growing a small business quickly adds complexity. More government rules and regulations come into play as well as federal, state, and sometimes international tax considerations. Lending also can become more complicated as greater capital may be needed and the lenders or investors may require more assurances. A careful plan, created following the points in this article, can help you plan for the type of growth you want while controlling the things that you don’t.
You took the plunge and started your own business. You've taken the risk, made the investment, scrimped, saved, sweated and had sleepless nights. Now, your business is running smoothly. Time to rest?
Well, maybe a little rest is warranted, but the law of attrition guarantees that those who stand still, move backward. No matter what business you are in, customers change, they outgrow you, retire, sell or close. Therefore, you have to keep moving forward (to take a line from the movie "Meet the Robinsons").
Planning for growth is different from planning to start your own business. One size does not fit all.
Few things make you feel so good as establishing a very successful, growing business. Feel the pride, but remember to keep your hands on the steering wheel with your eye on your compass of goals and your horizon of values.
First Step: THINK
To begin planning, first you need to set the framework. The figure below shows an integration of business perspectives and concepts that help move a business forward in the direction that it wants to go. This is known as a balanced scorecard. Keep your growth but don't lose your business along the way. It's a balance of money, goals, culture, and expertise.
First things first - Why do you want to grow? What is your "end game?" In other words, what does a successful company look like to you? Focus on your goals - not someone else's ideal of success. This question needs to be answered by you and, if you have them, your partners. If you have partners, how does their vision align with yours?
What is your timeline? If you are growing to sell and then retire, what is that date? The timeline helps you determine how aggressive your growth needs to be and if it is doable. What is your risk tolerance? If your timeline is short, then your risk may be higher. How many sleepless nights is your risk tolerance worth?
What does your growth mean for your customers or your market? For example, there has been a move in recent years for large regional accounting firms to complete with the Big 3 accounting firms. If your firm has built its business as a Mom and Pop businesses, how does the required need for depth and sophistication (and the related expenses) fit with your original clients? Do your existing clients want that "new you"? Can they afford it?
What does this growth mean for your key processes? Are you adding complexity to the services that you offer? How do you maintain quality when you add volume and employees? Is your current process sufficient? As your clients grow in sophistication, you need to make sure that you catch errors and add value so you can keep those clients.
Growth in your client base can encompass more states or countries. Don't let the complexities stop you, but you must be aware that other states have requirements for their own sales tax, tax returns and payroll taxes. International sales add even more complexities and many countries have goods and services tax which is on importing as well as exporting. Hire or employ the expertise that you need.
Can your employees handle the change? Do they need more training and expertise? Do you have the right technical people? If not, what will it take financially to hire them? How does the increase in number of employees affect you? The Fair Labor Standards Act, the Family Medical Leave Act and COBRA are three laws that impact employers depending upon the number of employees that you have.
How do you maintain the culture? A small business of less than 20 people feels a lot more like family than 50 employees or more. Long time employees feel left out if newer employees seem to be seizing opportunities more quickly. You must pay attention to how you will keep your workforce connected as you grow. What steps will you take to keep your culture intact or move it to a different plane?
Many companies realize that to prosper in the coming decade, they need to turn to the fundamental issue of strategy. What is strategy? Strategy is “Where do you want to go?” and “How do you want to get there?”. Take your answers to the above questions and begin to strategize on how to get there.
Second Step: INK
Put it on paper - strategic planning is often talked about, but rarely completed in most organizations. Strategic planning requires time for consensus building. The biggest reason for failure is that there is not enough time given for buy-in and therefore often the plan is not acted upon and there is no consequence for failing to act. Therefore, many organizations feel strategic planning is a waste of time. You will never get to where you want to go if there isn't buy-in from your core group. A good strategic plan covers the following:
- Core values and core purpose - Establish the organization's purpose, mission, and future vision. Identify core competencies, (what can you be the best in the world at?), core purpose, core values (what are you passionate about?), and lastly, what drives your economic engine?
- Right people in the right positions - Identify whom to involve in the strategic planning process from your organization and assess competencies.
- Goal clarification - Set priorities and link strategies to the organization’s overall vision.
- Game plan - create an action plan, objectives, and monitoring process. This is where most plans fail - wimpy actions and no enforcement of deadlines or appreciation of deadlines that are met.
- Performance measures and team dynamics - Implement and action plan against the plan’s objectives.
- Monitor and communicate - Create on-going communication and measure performance. Communicate the failures and celebrate the successes.
- Reassess and renew - Harvest learning and seek new opportunities.
Third Step: SYNC
Get buy in - remember the Steven Covey habit of seek first to understand, then to be understood. So many times, management "thinks they know" when they don't. Listen in an unthreatening manner. Receiving criticism will make your company stronger and will build loyalty with your employees.
Take your strategic plan and then work on implementation with your management group and a cross section of your employee group. Employ the idea of "Storm - Form - Norm – Perform." Employees, and that includes management, need time to fight with a change, figure out what it means for them and then grasp the idea, get excited about it and run with it.
Your strategic plan should:
- Serve as a guideline for actions and decisions.
- Communicate, inform, motivate and involve others.
- Assist in benchmarking and monitoring performance.
- Stimulate change and future focus.
Developing your organization’s strategic plan comes down to creating, engaging, sustaining and empowering. Success breeds success. Get your entire team motivated, focused and committed! Remember to work with professionals whom you trust - either hire them or employ them. And keep linking back to that plan, the goals, the vision and reassessing "Am I still on track?”
Few things make you feel so good as establishing a very successful, growing business. Feel the pride, but remember to keep your hands on the steering wheel with your eye on your compass of goals and your horizon of values. Doing that, you will continue to excel on your terms and create the future of your dreams.
