Challenges of Growth
Updated: Jan 9, 2019
It’s exciting times in our economy. The markets, although volatile, are at record highs, unemployment is at 17 year historical lows , and businesses are growing, including Journey Consulting, LLC.
This past week we moved into the Initiative One Building at 110 S. Adams St., Green Bay, and are very excited about the continuation of our journey in partnering with our clients on their journey of growth and profitability.
As our clients work through the opportunities and challenges of growth, it’s great to be able to share in their experiences in our own journey. We have had the fortune over the past 10 years to build a consulting practice that added our first consultant in September 2017, and are beginning our search for another consultant and executive assistance to join our team. We, as many of you, are experiencing the challenges of growth, so I thought I would share some helpful tools as you’re working through this in your own company.
1. Lead Generation Challenge – As a business is growing, there is always the challenge of business development while you’re trying to service the needs of existing clients. As growth occurs, there is now a new infrastructure that requires consistent feeding.
Answer: Feed your winners and starve your losers. It’s back to the 80/20 rule. Focus your time, energy, and resources on those activities and referral sources that bring you 80% of the work and stop spending the time on the bottom, that are only generating 20% for your business.
2. Lead Conversion Challenge - On the other hand, there can be too many opportunities that you can’t effectively follow-up on and/or effectively service the needs of all.
Answer: Create a “filter”, or in strategic terms, a “mission statement” that identifies who you are, what you do, and where you do it. Use the filter to create buckets that allow you to invest your best sales efforts and resources in your best leads.
3. Operational Constraints – Depending on the speed of growth, operational capacity may not keep up with demand. It may feel like your operational pillar is bursting at the seams. If only you could find more “producers” to do the work, you have a ton of business waiting to come over to you. You’re afraid to take on more business because you’ll overwhelm your company’s ability to fulfill on more business at the same quality and service level.
Answer: First, get clear on what your real production limiting factors are. Is it a specific person or functional role that is your bottleneck? Is it the flow and communication across people or departments in the production process? When you spot your real limiting factor then you are able to solve for the most important variable.
Do you need to hire more? Do you need to push down tasks and responsbilities to best leverage your most skilled and scarce process “experts”? Can you create better efficiencies to get more production out of the same resources? Do you need to better train your team? Can you automate or template more of the work?
Is firing your lowest margin business to free up capacity for better, higher margin business that is clamoring at your door to work with you, the option? Or, you may need to raise prices – supply demand remember?
4. Financial Challenge – Growth takes cash! It can be tied up in receivables, it can be invested in hard assets, such as equipment, and/or people that are not yet producing at the level needed.
Answer: Understand your cash flow and how you’re going to fund your growth. The cheapest way to fund growth is through management of your receivables. If customers/clients are paying slow, better management of expectations can improve your cash position. Also, how are you billing for your services? Can you collect more up front in the form of a deposit and/or down payment?
Growth, although very exciting, can quickly cause a business to fail if not effectively managed. Being open to change, and realizing that past successes don’t equate to future successes. Regularly visiting and updating your business plan can help remind you of the changing market conditions and the need to respond to them.
You need to be fully committed to your strategy, even if it takes you out of your comfort zone.
Journey Consulting is excited about its next evolution, and we are so thankful for all of you who helped get us to this point!
Jayne McQuillan, CPA, MBA, CEPA is a strategic management consultant, and the owner of Journey Consulting, LLC, in Green Bay