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Is It Time for Your Company's Next Physical?
By Rudi Scheiber-Kurtz, Founder & CEO, Next Stage Solutions, Inc.
You are a CEO of an SME (Small and Medium Enterprise) with successful sales, offering various products or services in several locations. You work non-stop to keep up with the day-to-day operations and worry whether the economy will turn around soon enough to meet your annual sales projections. You recognize the soaring operating costs and potential declining sales demands. The corporation's growth strategy may need to be tweaked--however, the daily short-term demands are always in front of you. Therefore, finding time to sit back to develop, assess and evaluate a revised strategy and implementation plan just does not seem feasible for you.
You are not alone; most SMEs face the same pressures to keep up with the daily demands of meeting the payroll and increasing sales and market share. Let’s examine some key factors to consider for your long-term growth strategy, particularly in how to define your most valuable business drivers and implement and communicate your new strategy for future growth.
Business Drivers
Business drivers are external and internal influences that significantly impact your business. Think about who your most valuable customer is. Does s/he provide you with the largest profit margins with the least effort? When you define your most valuable customer, you not only want to examine the revenue from sales s/he provides, but also determine what the overall support costs are and how customized her/his demands are. So often we focus on the top revenue customer and less on the second or third in line. How can you increase their sales volume?
Other important external business drivers are the industry and the markets within. Which is your most valuable product or service given the geography and the norms of the industry you are in? What can you do to continuously gain on your competitive edge? The focus on your customers is of high importance as you develop new products. How well do you know each customer? Do you know their pain and can you identify added value you could provide for the firm, its clients’ suppliers, and its partners to build on the existing relationships? The more you know about your customers’ needs, the more value you add and the tighter the bond. In the long term, this positions you well with your customers. It is relationship building that enhances customer loyalty, which will play to your advantage for a strong competitive edge.
Tweaking your Corporate Strategy for Growth
Thinking long-term and working on a growth strategy--as well as analyzing your current business model, your business drivers and new markets-- are thoughts that are often forced to be put on hold. However, taking the time to think and reflect is never more important than in an economic downturn.
Your employees and you are already working at capacity and there is no budget to hire a consultant. Ask yourself - Can you afford not to take action? Having another set of lenses from the outside to evaluate your business can be indeed revolutionary or even transformational in how you proceed.
Where do you want to be in one year with your company? Are there aspects of your business that are taxing your resources? Which ones are they? Evaluate the costs and benefits of outsourcing. Are your employees focusing on the core mission or are they working outside their expertise? Is this a good time to restructure?
Take the time to explore other markets and get help to assist you with the communication and implementation plan of your new corporate goals and objectives. Create more efficient business operations systems and stabilize your cash flow for at least the next six months. Identify specific industry and market risks that you cannot control and plan accordingly for your cash flow reserve. Develop multiple capital budgets and consider growth financing options to come up with a strong capital mix.
Operationally, you will want to reduce costs in automating your back office. Do you have the infrastructure needed for your next level of growth? Identify your external and internal bottlenecks and make changes as appropriate. Financial metrics are only a measure of past performance and you must consider non-linear metrics such as small portions of your business that drive the majority of your effort and energy. Carefully analyze the outliers and do not use averages - they distort and mislead you in setting strategy.
Finally, keep strengthening your core competencies, both tangible and non-tangible. A new and robust strategy is about change and in identifying key drivers that will bring you that change.
Communications and Implementation of new Growth Strategy
Once you have developed a clear growth strategy, new or modified, you must align it with clear execution points and milestones. Communicate your new business scope with your employees, as this is the most important internal business driver. Design a process for clear execution and direction; you want to be in a position where you can be proactive rather than reactive. Perceptions are powerful and it is necessary to be in charge of the internal “grapevine” with a strong communications style. Energy is omnipresent when everyone is on the same page.
In summary, focus on the market and your customers by honing a strong corporate strategy that includes a detailed execution and communication plan to generate efficiencies, both externally and internally. Seriously consider an expert outsider’s point of view and assessment of your company’s status; you want systems and procedures that allow you more time for the long-term strategies and market research that gives you the critical competitive edge in this uncertain market. Your corporate strategy is very important for your corporate health and the time may be now to get your company’s next physical.
Rudi Scheiber-Kurtz of Next Stage Solutions works in the realm of early and mid stage businesses providing strategy with core competencies in finance and operations. She brings extensive experience in supporting young businesses and works cross-industry bringing her clients a unique understanding of how to build a robust, profitable business. Rudi acts as Business and Financial Advisor to ensure rapid integration and transition to the company’s next stage. Her style is process oriented; she works closely with the executive team in establishing short and long term goals. In addition, she applies her hands-on approach in developing timetables with achievable and executable milestones. She brings in-depth expertise in connecting the dots for all activities of a company, with a laser sharp focus on financials. For more information, visit www.nextstagesolutions.com
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