Now
it’s one thing to start a business but growing a business is where the
true business challenge lies. I got the inspiration to write this piece
after reading the article; Why Grow? And Other Wisdom from 37Signals. All entrepreneurs desire business growth but most of them don’t know why they need to grow and how they want to grow.
Now before you begin to seek answers on how to grow a small business; you must ask yourself the questions: why do I need to grow? What kind of growth do I want? How do I grow?
The
answer to these questions is very important because it will help
determine your business growth pattern, plan and strategy. Well, while I
can’t help you discover your need to grow; I can definitely provide you
some tips to growing a small business from scratch with little or no
money.
I have started and grown several
businesses from scratch with little or no money. I believe in running a
business on lean budget; I believe in tactical deployment of resources
and this business philosophy has worked for me over the years. Now
how did I grow from a small business to a big business? How did I
survive and expand my business on a lean budget? You are going to find
out below.
How to Grow your Small Business Internally on a Lean Budget
1. Focus on the business mission
The
first strategic step to growing your small business on a lean budget is
to focus on fulfilling your business mission. On the entrepreneurial
journey to growing your business, I will advice you start from the
business mission. Why?
“The thing I really care about is the mission; making the world open.” – Mark Zuckerberg
The
reason is because the business mission is where the entrepreneurial
spirit dwells. It’s the heart of the business; it’s core. Most
importantly, your business mission is the reason why your business
exists.
You might grow your small business to a
substantial size but if that growth does not help your business fulfill
its mission; your business growth will be short lived. So stay true to
your business mission; it’s the first prerequisite to growing a business
successfully.
2. Develop a challenging vision
No
entrepreneur wakes up one morning with a desire to grow. The need to
grow a business is usually prompted by circumstances and such
circumstance can help you forge a vision for your business. But is a
vision enough to help you grow a business? I don’t know. But what I do
know is that the kind of vision you develop depends on how fast you want
your growth rate to be and the level you want to grow to.
However,
I will advice you set challenging goals; goals that will force you out
of your comfort zone. Don’t develop a vision you are comfortable with;
develop a vision that makes you uncomfortable, develop a business vision
that forces you to use your critical thinking skills.
One
of the visions of my company is to grow into a conglomerate in at least
five different sectors of the economy by the year 2020. For me, this
vision is challenging because it forces my entire business team to come
up with creative growth strategies that enable the business grow faster
than the average industrial growth rate.
Knowing
the resources we have at our disposal, this vision seems impossible but
my team believes it’s achievable. So don’t settle for average; set a
challenging business goal and go for it.
3. Reposition your business team
“Bringing together the right information with the right people will dramatically improve a company’s ability to develop and act on strategic business opportunities.” – Bill Gates
The
third key to growing your small business from scratch on a lean budget
is to reposition your business team. To grow your business, the right
people have to be in the right position.
Analyze
the strengths and weaknesses of your business team and delegate duties
to them according to their strength. If there is a weak chain in your
business management team; consider bringing someone in to fill the gap. A
strong business management team is essential to business growth.
4.Emphasize the need for speed, effectiveness and efficiency
Are
your employees aware of the need for your business to grow? Are they
aligned with your business mission? Do they understand the vision? These
are questions you must put to rest.
In an article I wrote “10 Business Challenges of Starting a Business”,
I emphasized that building a business team is a major business
challenge but selling your vision to your team is more challenging.
“The most important ‘speed’ issue is often not technical but cultural. It’s convincing everyone that the company’s survival depends on everyone moving as fast as possible.” – Bill Gates
Business
is a team sport; you can’t do it alone. Employees are your
representatives to the customers; this is the more reason why they need
to be fully aware of your business goals and objectives.
5. Strengthen your business internally
Most
entrepreneurs are always in a haste to grow externally because it’s
more obvious and gives the entrepreneur a sense of prestige. But more
important than external growth and expansion is the internal growth. I
have seen businesses fail because of too much success. They grew big but
couldn’t sustain the pace; so they shrink and collapse.
This is why you need to grow internally first. Now what is internal growth?
Internal business growth entails strengthen your bottom line, improving
your employee’s effectiveness and machine’s efficiency. It may also
mean repositioning your business team and automating your business
processes. Once a business effectively grows internally, growing
externally will be seamless.
6. Keep an eye on the cash flow
“Cash never makes us happy. It’s better to have the money burning a hole in Berkshire’s pocket than resting comfortably in someone else’s.” – Warren Buffett
Cash flow is the life
blood of business. Remember that you are growing on a lean budget, so
every penny has to be accounted for. You must know your numbers and
above all, you must know your financial position at all times.
“The most important word in the world of money is cash flow. The second most important word is leverage.” – Rich Dad
7. Take care of your customers and encourage word of mouth
“Focus on your customers and lead your people as though their lives depend on your success.” – Warren Buffett
Remember
I said earlier that a good internal growth will make your external
growth seamless.Now while growing internally, you can instigate external
business growth by taking care of your customers and encouraging word
of mouth. Customers are the reason you are in business so make sure they
are not ignored during your growth process.
“The most important single thing is to focus obsessively on the customer. Our goal is to be earth’s most customer-centric company.” – Jeff Bezos
Find
as much customers as you can and keep as much as you can. Most
importantly, allow your existing customers help your business find more
customers by encouraging them to talk about your company. Word of mouth
was the way Amazon and Mrs. Field’s cookies grew to become multi billion
dollar companies.
8. Go strict with employee performance evaluation
So
you want to grow your small business on a lean budget? Then you must
maximize every resource at your disposal, leaving no room for
inefficiency and waste. You must also evaluate your employee’s
performance rate at regular intervals and any employee that doesn’t meet
your standard should be fired.
“Well yes, I have fired a lot of people. Generally I like other people to fire because it’s always a lousy task. But I’ve fired many people.” – Donald Trump
9. Seek strategic alliance
“Our success has really been based on partnerships from the very beginning.” – Bill Gates
Forming
strategic alliance is an effective way to grow big, while still
remaining small. Look within your neighborhood first for opportunities
to form strategic alliances and if you can’t find any; create one.
10. Focus on the core and outsource the rest
If
there’s any secret to growing a small business from scratch on a lean
budget; then it’s definitely outsourcing. Outsourcing is the reason my
entire business keeps growing; yet, I remain small. To the outside
world, my business size is still the same but on the inside; my profit
is doubling.
To really appreciate the power of outsourcing, I will advice you read “Why Grow? And Other Wisdom from 37Signals”,
it will change your perception about growing a business. With the rate
at which business is changing, it’s now possible to operate a million
dollar company from just a small office using the power of outsourcing.
Every
business has a core. So find your core, focus on it and outsource the
rest. If your core is marketing, focus on it and outsource every other
thing. Every business process can now be outsourced; from production and
distribution to human resource management.
11. Re-invest the profits
Growing
on a lean budget requires you re-invest every single profit into the
business. Re-investing profits is essential to business growth.
12. Stick to the process; keep growing
The
last but not the least step to growing a small business is to stick to
the process. Building a success business is not an overnight process;
it’s a process that takes time and requires persistent. To stick it
through to the end of the process, you need to see the big picture of
where you are heading to; you need to envision the end point of that
process.
“Press on. Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.” – Ray Kroc
Starting
the growth process of a business is easy but keeping at it is difficult
because with growth comes the need for constant change. If you are in
the same entrepreneurial journey of growing a business with me, I
encourage you to stick it through and keep moving forward. I will see
you at the top.
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