What is the scalability of your business? How poised are you to scale to the next level?
Market trends are favorable. Your customers seem pleased and have increased orders. You feel you are doing all the “right” things the “right” way.
For smaller businesses “just about there” in their quest to move to the midmarket arena, factoring in scalability becomes the fulcrum for leveraging and managing growth.
You’ve heard the expression: “Be careful what you wish for. You just might get it.”
Have you been closing in on your revenue goals without being proactive and anticipatory of their total impact on your existing infrastructure? That strategy is like throwing a party where everyone shows up…. and brings a friend.
What is the scalability of your business? What are the factors impacting the scalability of your smaller market business as you strive to fulfill midmarket requirements? Thorough due diligence in this area is needed when creating next-level tactical and strategic sales goals.
It’s everyone’s goal to make their numbers. Yet how robust are your current processes, practices, operations and capacity to honor those numbers?
Scaling your company for growth involves collaboration: with your existing employees, colleagues, suppliers, investors and your customers.
Increasing your customer base or your revenue stream by 20% can be accomplished by adding many customers with small orders. We’ve all experienced the scenario where management mandates an X% increase in revenue and sales reps chase the low-hanging fruit types who will do business with them. While you’ve achieved your goal, that strategy can clog up your capacity to accommodate larger, complex orders from desirable target customers.
Is that the type of 20% increase in customer base or revenue stream that you were thinking about?
What is the impact of targeting strategic relationships with bigger companies when your entire business is modeled on serving companies who specify smaller jobs involving rapid turnaround and less sophisticated output? Perhaps a more feasible target is to increase existing business with your current customers. Let your company become the go-to supplier for all types of rapid turnaround output, not just that one-part, one-service project your customer has pigeon-holed you into.
That type of strategy can stabilize your customer base and enable growth into new marketplaces with similar requirements.
Targeting larger, strategic accounts involving a greater degree of customized throughput and output can stress your existing internal engineering and operations capabilities. How quickly can you ramp up and hire in to accommodate these types of desired customers? That’s not all. In addition to hiring on personnel to create throughput and output, you also may need to order raw materials with Net Zero terms. Those dual needs can severely impact available cash flow.
While all companies desire to grow, growth is never linear. It’s logarithmic.
Your growth strategy starts with thoughtful evaluation of the scalability of your present enterprise to scale. That thoughtful evaluation isn’t conducted in a vacuum, or internally.
Consider collaborating with your current customers. Determine their collective Voice. You may gain greater insight regarding how to streamline your current operations, implement process improvement, and free up cash and time to focus on growing your business.
Are you planning on scaling for growth by inviting new customers to your growth party? The most feasible strategy may involve collaborating with your existing customers first. They are your best advocates.
Babette N. Ten Haken, is President of Sales Aerobics for Engineers®, LLC . She catalyzes business transition, startup growth, and professional development for non-traditional sellers, engineers, manufacturers, and technical startups. Her book on collaboration strategies, Do YOU Mean Business? is available on Amazon.com.