The vast majority of indicators that a company is ready to achieve the next level in its growth journey can be found within its foundation – its:
When you are 100% confident in all three of these foundational areas, deciding to pursue growth and determining your growth strategy become much easier because the answers to how much to grow and in what direction are either written in black and white (quite literally in your company’s data) or can be easily explored by asking yourself a few key questions.
That said, it’s one thing to talk about these foundational areas broadly and quite another to know exactly what signs to look for.
So, let’s get into the details with 8 common signs that your company may be ready for the next level of growth:
#1: You understand and can COUNT ON your revenue model. You know how your company makes money and you can predict output based on input. This means you know where each dollar of revenue is coming from and you can identify which efforts are yielding the best results. For example, you know that if your sales person makes x number of cold calls you will convert x% of those prospects into customers.
#2: You can predict the future. You have solid financial systems and are generating the data and reports that enable you to explore various growth scenarios for feasibility and profitability. In other words, you can prove that your company can grow not through sheer force of will, but through hard data. Additionally, you know what growth will look under enough reasoned potential futures to determine your best path forward.
#3: Your company is already profitable AND its success is sustainable. Your financials prove that your company is making a profit, and that its profit is not a fluke. Additionally, you have the cash flow to support growth, or a solid plan for attaining growth capital that makes fiscal sense. Additionally, you know your payback period (how long it will take to recoup your investment in growth).
#4: You’ve had ups and you’ve had downs – and you’re still alive. If your company survived the economic downturn, it’s a good sign that, with the right growth strategy, it can weather the twists and turns of growth. However, your survival has to have been based on more than dumb luck. You should know exactly what you did to survive, why you did it and why it worked.
#5: Your company is a customer-generating machine. You have a strong customer base that includes repeat business and you may even be seeing referrals from sources you don’t personally know. Can’t meet demand? Even better – because it’s potentially a stronger sign that it’s time to grow. The only time when not being able to meet demand is bad thing is when the following sign is NOT true … (because if you can’t meet demand thanks to poor processes and/or systems, you have more foundational work to do).
#6: You have strong processes and systems in place. A new employee could come into your company and be up to speed quickly – not because he or she is smart and just happens to have been trained by your best employee, but because they learned and followed your company’s documented processes. Equally, you have the systems your company needs to avoid risk and run efficiently and there are redundancies in place in case of emergencies such downed network.
#7: You can’t wait to delegate. While this is in no way a stand- alone sign that your company is ready for the next level of growth, it’s important to make sure it’s true before you commit to taking your company forward. Leading a growing company requires being the visionary, not the person who manages the day to day. The company of a CEO who’s simply not ready to delegate is likely to crash and burn under a serious growth scenario.
#8: You’ve done your homework. You know what your current market share is and the additional percentage you can capture. You know who your customer is and how to address their needs even further. Or, you know what trends are on the horizon and how to capitalize on them. Whatever your growth strategy is going to be, you’ve done your research and can make a rock solid argument as to why you’ve chosen the growth strategy you have and what you expect (and can show) the results will be.
As with taking any next step toward any next level of anything, it’s likely not one indicator, but a set of indicators, that provide you with enough proof that the time is right.
In all cases, you must make sure your financial, operational and leadership foundations are solid – that you’re receiving accurate data; that you have a strong team, processes and systems; and that you also have a clear vision – before considering a plan to achieve the next level.
The great news is that if you’re seeing some of the non-foundation-related signs that growth is within your company’s reach (such as new opportunities to capitalize on), but you haven’t yet shored up your foundation, doing that work doesn’t have to delay your growth strategy for long.
Understand what you need to tackle, make a plan and get it in motion, and you can commence your growth strategy right away.
P.S. Are You Ready for Hyper-Growth? Assessment and Action Planning Guide includes a full list of potential roadblocks to growth for each foundational area (financial, operational and leadership). Download this assessment and you’ll quickly be able to identity any growth-gap areas you need to address.
If you aren’t sure if your company is ready to achieve the next level of growth, you’re not alone. Many CEOs – even of companies at the $5M mark – don’t have a clear picture of where their company is today, not to mention where it has the potential to be tomorrow.
If you want to quickly assess your company’s growth readiness and develop a wise growth strategy, working with me as your Growth Advisor is a high-return investment in your company’s future. To find out more about Growth Advisor, click here.
Tags: Assessment and Action Planning, CEO, Financial Foundation, Growth Advisor, growth strategies, Growth Strategy, Leadership foundation, Operational foundation, revenue model, success is sustainable, Time to Scale