Is your business ready to grow?
Updated: Jun 16, 2021
So, you have crossed the 5 year milestone sometime back, having successfully navigated the multitude of challenges every business owner faces. You have reached a stage where your processes are set, your schedule allows you free time, your mind has been buzzing with new ideas and you’re itching to try something new. This is when most business owners covet growth for their business and start moving towards it. However, growth is about timing and not itchy fingers. If you adopt a trigger happy approach to growth chances are it will misfire.
Growth is critical to the success of a business but it needs to be handled carefully, many a successful businesses have sunk because they got their trajectory wrong. Our very own Kingfisher Airlines is a classic example of a growth trajectory gone wrong. Fortunately such expensive mistakes can be avoided by simply reading the signs right.
Signpost numero uno is – A steady cashflow. You know you can think of growth when your revenue is clipping along at a regular, predictable manner without too many inflections. You have a steady stream of regular business and do not have to chase revenue.
The industry is growing. Your business maybe making money but the industry is either stagnating or degrowing, that’s a sure sign to curtail any expansion plans. However, if the industry is growing at a comfortable pace and you have new competitors being added every year then that’s a good sign for expansion.
Demand is outpacing supply. This is a no-brainer, if your customers want more of your product, service or hours that’s a sure sign you need to expand. All you need to assess is the character of the demand – is it profitable and easily scalable.
You’ve been posting regular profits. If your net income has been expanding for at least 3 years, then it’s a sign you are doing it right and more of the same could result in fatter margins.
You’ve the right people in the right place. Your current revenue model cannot be disrupted to make way for growth, then the whole enterprise will implode. Hence a critical assessment is that you have the right people at the right place to ensure continuity. Similarly, for growth too you need to be sure of those who will handle this for you. Plunge in only when you are confident of your team.
No single factor can predict whether you’re ready to take the dive into growth, rather it will be a combination of these factors and a certain feeling of readiness born out of confidence in your current dynamics.