Blogs
Managing Growth
Recently we had a very interesting meeting with a long-standing client who is experiencing tremendous growth and facing a number of decisions. They just landed an expansion of their core business based on the recommendation of a key supplier. We discussed how they can best take on this expanded business while maintaining their historic margins without over-taxing their management or their current resources – all looks well on that front. We emphasized the need to make sure the business expansion keeps to the plan they had established to develop this segment of the business.
Meanwhile a major opportunity is developing to expand into a new territory and become the sole source for a major new client. In this developing market, they have the opportunity to be a total solution provider including all facets of their business. We recommended a strategy that should allow the company to illustrate all of their strengths to land this new business.
The client committed to come back in a month’s time with an update on all of these initiatives and plans for the next quarter.
Is it always necessary to grow an already successful small business?
This is a great problem to have, when you are already profitable and feeling in control of your business. It was just such a ‘good problem’ facing one of our smaller owner operated business client.
It had been many years of effort, building a company and a solid reputation of fair price and great quality, not to mention excellent service and great client relations. 80% of his business was coming through referrals.
The challenge was this. The client had already experienced problems when in the past he tried to grow and delegate down. He loved to be ‘hands on’, being out there for his clients. According to him, his team never had such an attitude, desire or dedication. Too much of his time was going into training motivating and then having to go back and fix his employees work.
Most entrepreneurs go through such a phase. ‘Nobody can ever do it as well as they can’. Only some are able to transform their leadership to accommodate such transition allowing a move to a larger organizational platform. Such a transition to a larger platform can be very profitable, but comes with its obligations. Many small entrepreneurs on the other hand, are happier staying course and remaining in charge of their small, but profitable businesses.
There is no right or wrong answer to this dilemma.
‘Different strokes for different folks’
Every individual has different strengths and aspirations. Knowing our client and his temperament,
Our advice in this case – Stay your course, sleep well at night
Dealing with unexpected surge in business
Just left the CEO of an auto supplier client of ours and his business is jumping. Lots of dislocation in the industry but the first quarter resurgence has left our man with company doubling opportunity. We discussed strategies and resources required and came up with a three week check list to maximize our resources while providing a shot at all the new possible business out there. We will meet again in a month or so to review progress and establish next steps based on results.
THE PRICING CHALLENGE
Whether you are selling products or services setting the right price structure is crucial to maximizing profits. Set the price too high and the competition will grab the business, set the price too low and you leave potential profits on the table.
First, know the market by doing your research carefully. Competitive prices may be available on websites or your existing customers may share information with you. Be careful that you are not being given misleading information to induce you to reduce your price.
There are many components to pricing. There may be quantity discounts, favourable payment terms offered, bundling of different products and services, contract commitments etc.
And always remember it’s value that counts and that includes factors in addition to price. Quality of service, prompt attention to orders and requests for help, on-time delivery and follow-up all count to enhance value.
Building customer relationships will make you the go-to supplier and the more you are seen as the business partner and not just the supplier the more secure your position will be.