BusinessHAB20 Inside Secrets to Grow a Business in Tough Time
20 Inside Secrets to Grow a Business in Tough Times | How do some small businesses manage to grow and thrive while others perennially struggle and miss opportunities that come their way? According to Alex Castelli, who heads the Growth Markets Practice of consulting firm Reznick Group, the most successful business owners display some clear patterns and habits.
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Castelli says his group – which includes many former entrepreneurs – sees business owners making the same mistakes that are often avoidable.
Here are 20 secrets for achieving growth even in a poor economy:
1. Grow to survive –
Many small or local businesses assume it’s best to reduce offerings to survive tough times. While this seems intuitive, sometimes the answer is to do just the opposite – to grow. Before cutting back and shrinking your business, consider first whether additional funding might help.
2. Check your ego –
You know your business inside and out, but that doesn’t make you an expert at running it.
Smart business owners know what they don’t know. Don’t be afraid to ask for advice and then, take it.
3. Remember your first fans –
Many entrepreneurs seem to forget who helped them get started.
If you have investors, keep them apprised of what’s going on.
Good communication is key. A good investor group can provide mentoring and other resources, so keep them involved.
20 Inside Secrets to Grow a Business in Tough Time
4. Share your knowledge –
In today’s business world, success and influence are in the hands of those who share their ideas and information. Yes, you might lose a little competitive edge by sharing your secrets. But you will gain influence, and possibly success. So when you’ve found a great tool or solution, or gained insight, tweet it, blog about it, author an article, post it to Facebook.
5. Hire someone to watch your money –
Lack of strong accounting and finance can be the only thing keeping you from reaching your financial goals.
Find well qualified people who share your vision and then step back and take their advice.
6. Know when to persevere –
Stick to your mission. Many would-be success stories end prematurely.
Because they give up when challenges mount.
Don’t let hurdles stop you. Arm yourself with market knowledge and an expert team and push through.
20 Inside Secrets to Grow a Business in Tough Time
7. But recognize when to change direction –
Still, there are times you may need to change direction or call it day.
And having the courage to do so can be liberating.
You may end up with a clearer picture of what will or won’t work.
8. Keep cash on hand –
One of the biggest mistakes growing businesses make is to run out of cash.
While the sun is still shining on your business or before your financial picture has a chance to turn sour.
Meet with lenders and/or landlords proactively to see if there are opportunities to restructure debt, payment terms, etc. Having cash on hand is critical for staying afloat and continuing to grow.
9. Get more when you have more –
Don’t wait until cash balances get low to secure more funding. The best time to get more is when you have more. Securing a line of credit while you still have money in the bank gives you the ability to negotiate a larger line and better terms. It also gives you the ability to make payroll during slow times and to have access to cash as needed. In addition, it gives you an opportunity to develop a business relationship with a bank. Waiting until you really need money takes away your negotiating power and leaves you at the mercy of the lender.
20 Inside Secrets to Grow a Business in Tough Time
10. Sell when you get the chance –
Many business owners miss, or worse – pass up – incredible chances to sell their company because they are not prepared to adequately evaluate the opportunity. Know where you stand in the marketplace at all times. That includes what your potential is, and what it will take to reach your potential. That way, when opportunity knocks, you’ll know what to do.
Have a question about growing your business in tough times? Connect with a SCORE mentor online or in your community today!
New business owners have numerous goals when they‘re starting out, including rapid growth and recognition for their fledgling venture. But overnight success isn’t often the standard:
There’s no specific “special sauce“ to add to the recipe for instant results, and nothing is guaranteed.
However, there are ways to reach growth milestones that can catapult a business to success.
We asked small business leaders to share their tips for accelerating growth.
11. Hire the right people
Before you can even think about your company’s growth trajectory, you need to ensure that you have a solid staff that can help you achieve it.
“With a small business looking to grow, it’s important to have the right players at the table,“ said April Davis, founder of online dating service Cupid’s Cronies. “They need to be people who aren’t afraid to roll up their sleeves. The words ‘That’s not my job,’ do not exist in their vocabulary. They have to be dedicated to the mission.”
“Hiring the absolute best people you can is a surefire way to ensure fast growth,” added Christian Lanng, CEO and chairman of business software provider Tradeshift. “It’s all about having the right team.”
20 Inside Secrets to Grow a Business in Tough Time
12. Focus on established revenue sources
Rather than trying to acquire new customers, direct your attention to the core customers you already have, said Bill Reilly, a Wisconsin-based auto repair entrepreneur. You can do this by implementing a referral or customer loyalty program, or trying out marketing strategies based on previous purchase behaviors to encourage repeat business, he said.
This focus on your established market is especially important if you’re trying to get funding.
“In the past, we would highlight our business goal to become a franchise, which didn’t resonate with banks,” Reilly said. “We learned to emphasize that there is a large market for what we do. This would pique a banker’s interest because he or she cares about the return on investment more than your business aspirations.”
13. Reduce your risks
Risk is an inevitable part of starting and growing a business. It‘s impossible to control everything, but there are plenty of ways to limit internal and external threats to your company and its growth. One important resource to help you accomplish this is your business insurance provider.
14. Manage your growth
“Small businesses need to manage their growth to avert disruptions that can bring business to a grinding halt,” said Mike DeHetre, vice president of product development at Travelers. For example, “the theft of employee data, customer records and product designs can destroy a small business, generating significant costs and eroding customer confidence and loyalty,” he said. “Not every business owner‘s policy covers data breaches or other cyber losses. Small businesses should be prepared by seeking insurance products that help them recover, including those that cover the cost of remediation and lawsuits.”
As small businesses grow, they may add space or equipment, create new products or services, or increase their operating and distribution footprint, so DeHetre advised periodically reviewing your policy to ensure you have the right coverage.
“It’s easy to forget this step amid rapid expansion, but you don’t want to find out that you’ve outgrown your coverage just when you need it the most,” DeHetre said.
20 Inside Secrets to Grow a Business in Tough Time
15. Be adaptable
One trait that successful startups often have in common is the ability to switch directions quickly in response to changes in the market. Lange noted that an agile approach to development, both in terms of your product and your company, will help you grow more quickly.
“By allowing yourself to adapt and change quickly, you’re able to test different approaches to business and find out what works best,“ Lanng told Business News Daily. “It allows you to fail, pick yourself back up and keep going.”
Chris Cornell, founder and CEO of Manhead Merchandise, said his company has found adaptability to be key in expanding its client base beyond the music industry.
“Look to current pop culture trends for an opportunity to become part of the movement, when it makes sense,” Cornell said. “In an era of internet-fame, we looked to expand our horizons beyond the music industry. We partnered with ‘The King of Pop Culture’ and insta-famous pup, Doug the Pug, to release his new gear. Recognizing the reach and popularity of Doug, we were able to take his merchandise to the next level, extending our business model beyond bands.”
16. Focus on your customer experience
Customers‘ perceptions of your business can really make or break a business. Deliver quality experiences and products, and they‘ll quickly sing your praises on social media; mess it up, and they’ll tell the world even faster. Fast growth depends on making your current and potential customers happy with their experience, DeHetre said.
“Compared with large companies, small businesses are nimble, and often better able to see, anticipate and respond to their customers’ needs,” DeHetre said. “The most successful small businesses exploit this advantage, by bringing new and innovative products and services to market more quickly and developing and nurturing long-term customer relationships.”
Dennis Tanjeloff, president and CEO of Astro Gallery of Gems, agreed. He said listening to your customers and giving them what they want is of utmost importance.
“Diversify your offerings so you can best cater to the customers’ changing tastes,” Tanjeloff said. “Remember, you are here to serve the customer — it‘s why you are open for business.”
Cornell noted that engaging with your audience is crucial, but personalizing the experience can boost and strengthen that relationship.
“At Manhead, we come up with unique creative designs, customized storefronts and pop-up shops personalized for each band [we work with] to help them engage with fans in a new way,“ Cornell said.
20 Inside Secrets to Grow a Business in Tough Time
17. Invest in yourself
In the early stages of your business, you‘ll likely see a very lean profit margin (or no profit at all), so any money you do make should go directly toward helping you grow.
“A startup’s ability to invest in itself [helps] accelerate growth,” Lanng said. “In those early years, it’s critical to make sure that you’re redirecting any revenues back into the company. It’s vital to invest early and heavily in order to grow quickly.”
18. Always think ahead
While agility is an important quality for a startup, you can‘t fly by the seat of your pants when you’re running a business. Planning your next step, even if that means anticipating all possible scenarios, is the best way to stay grounded and secure as your business evolves.
“Set the foundation in place, water it and watch it grow,” Davis said. “If you do the foundational work, when you experience growth, it won’t be that difficult to adjust, since the hard part is already done.”
20 Inside Secrets to Grow a Business in Tough Time
19. Make marketing pay –
Evaluate your marketing program to improve efficiency and effectiveness. The old ad adage is that “I waste half of my marketing dollars. I just do not know which half.” You cannot afford to do that in tough times. If you cannot see ways to maximize your results, get some advice. Do not cut your budget, make it pay for itself. We have seen many businesses take advantage of a downturn with increased marketing exposure at lower rates while competitors pull back. The resulting increased market share holds up when markets grow again.
20. Watch your cash flow –
One mistake that kills a growing business fastest is running out of cash. Business may seem great, but the need to extend credit to customers and not collecting soon enough to keep the bills and payroll up to snuff can kill you. This problem is more prevalent in hard times when customers try to stretch their terms to the max. At the first sign of problems, do not wait; talk to customers about it; meet with lenders and suppliers proactively to see if there are opportunities to restructure debt, payment terms, etc. Having cash on hand is critical to stay afloat and continue to grow.
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