If you aren’t growing a business, you’re dying

Growing a business is tricky?  Business is always on the knife’s edge of growing or contracting.  It’s scary when it’s contracting and just as frightening when it’s growing.  Leaders are constantly swinging between two questions in their head: “How can I grow this business better, faster, cheaper, etc?” And, “With this growth how can I manage, deliver, keep, service, etc?”

Over the last eighteen years of business, we have asked ourselves these questions multiple times.

We also know what it is to contract and to grow.

To be honest, growth is always what threatened the business more than contraction.

Growth hides a lot of problems

When you are growing a business you are focused on servicing that growth.  Many operational and budget issues tend to fall to the back-burner.  Why worry, right? You are making all this money and gaining new clients.

However, the growth and associated revenue tend to mask deep structural problems forming in your firm.  Scaling is the number one cause of death amongst startups. A study by StartupGenome of more than 3200 startups found that 74% of failures occurred because of poorly timed scaling.  But this isn’t just a danger for startups. It’s a danger for all firms.

There are three ways growth threatens your business

#1 Processes are ignored

The number one area that is immediately challenged by growth is established processes.  Or more likely, the lack of any processes. If you do not have processes in place, you are operating a business without the backbone necessary to successfully and repeatedly deliver quality work product.

Growing a business tends to have us focused on the near-term need.  We react to the urgent at the expense of the important. When this happens, your new prospects dictate the delivery and cadence of your work.  As you grow, the next client will do the same if left unchecked.

Once you have done this over and over, you can’t untangle yourself from the many different tools, solutions, processes, and nuances of doing business.  Eventually, it will overburden the business.

#2 Documentation falls away

In tandem with processes falling away, is documentation.  Documentation is the roadmap and history for all client engagements.  When this is abandoned or short-cuts are performed, the value of the client engagement will start to fray.  

With growth, you will be bringing on more resources to service the business.  Clients will be served by newer employees without the historical knowledge. When addressing client needs they will find the documentation wanting and be less able to serve the client.

As you know, this leads to eventual client attrition as they lose more and more confidence in the value of the services.

#3 Diminishing returns on new hires

And finally with growth comes headcount growth.  Your clients are growing so it’s not unreasonable to think so should your team.  When you bring new team members in, you are challenged with training, culture fit, and ramping up into your processes and understanding your business.  

This takes A LOT of work.  It takes a great deal of time and effort to find the right person and even more time to train them. Of course in a tight job market, it’s even harder to keep them.  

As you can see this is a domino effect.  The lack of processes leads to failure in documentation and leads to diminishing value in new hires.  And eventually threatens the business you have grown.

How do you plan for growth? First, focus.

The key is focus.  Focus on your core services, core audience, and core tools – in that order.  This is what growing a business is about.

First, define the core services you deliver to your clients and what the components of those services are – reports, designs, etc.  Then segment what services require client face time and direct interaction and those that are behind the scenes.

Second, establish who you are serving and make sure you maintain strict control on acquiring new clients that make up that market segment.

Lastly, look at your tools.  Make every effort to reduce the number of tools, platforms, etc you use.  This reduces complexity and training time while increasing the value of the time you invest in using and learning them.

Now to grow and scale

Once you know your core services that require face time and those that don’t, you can now address how to scale.  Facetime is probably one of the greatest drivers of client satisfaction in growing a business.

You need to address how to scale the direct client interaction services.  You can’t clone yourself exactly. However, you can find team members that fit your firm.  Find great people that reflect your values and understand your business. That takes time and work, but it’s necessary.

However, the areas that don’t require direct client interaction can be addressed in one of two ways.  Ask yourself two questions: 1) Can I automate this service with technology? If you can’t, the second question you should ask is 2) Can I outsource this to a trusted partner?

Growing a business with this secret weapon

This used to be the secret weapon only large businesses had in the past.  Not so anymore. Global networks make outsourcing not only accessible but strategically vital for any business to grow.  

Identify the services with highly repetitive, rote tasks.  Document these and build an inventory of work that can be outsourced.  Find a partner that can deliver these with the quality and timeliness required.

We have found partners who outsource their work to an offshore partner save upwards of 60% or more in labor and operational costs.  For instance, at Dinamis you can have a full-time, dedicated bookkeeper or back office support team member for nearly a fourth of what it costs in the US.  

It’s a great solution and we have documented its success for one of our clients.  Our case study on this national fin-tech company sums it up best as they grew from 80-1400+ clients and 20 employees to 140+ in three years.

Don’t let growth threaten your business.  It doesn’t have to. You can make this work.  Find the right partner to help you scale and you will make it just fine.  So let’s start growing a business today.

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