Updated: Jun 11, 2019
In last week’s post I discussed two of the most deadly mistakes that small business owners can make regarding their businesses. Today let’s talk about the next two items on the small business mistakes list:
Taking on more than you can handle
Putting all of your eggs in one basket
Scaling Your Business
Most small business owners find scaling their business a challenge. Without a solid growth plan that incorporates logistics for scaling, you risk growing too quickly with the result of disappointing your customers. To avoid this situation, it’s imperative that you develop a solid plan for accommodating growth.
When you scale without a plan, your business resources and systems can’t handle the increased activity. You’ve “taught” your customers that they can expect great service and quality products/services from you. They won’t know or care about your business’s operations challenges.
So . . . what are some of the signs that your business is suffering from growth without a plan?
Missing customer deadlines or needs going unmet
Declining employee morale and unhappy customers
Moving from one crisis to another — constant ”firefighting” Keeping up with new business is preventing you from focusing on existing customers
You can get your business growth back on track if it’s suffering from any of the challenges listed above. By using a growth framework, you can:
Increase your business sales in a short period of time
Refine your products/services for improved delivery
Delight your customers through delivering on the promises you made to them
The framework uses three components that will help you get your business back on an organized growth trajectory.
Identify the principal issues with your customers.
Evaluate your processes (especially your escalation and mitigation processes) and systems, repair “choke” points, and handle problematic “moments of truth”.
Gather your best team to address your customers’ issues, fix any discovered obstacles, and mend broken “moments of truth”.
When you implement this framework, you and your team will be able to communicate better with customers, anticipate problems more effectively, and develop a continuous improvement program.
“Eggs in a Single Basket”
While focus is critical to the success of your business, so is diversification!
Allowing your business to become on a single customer, or customers in a single industry or business sector, can be deadly to your business. Sooner or later, economic cycles will affect your customers, and therefore, your business as well.
Diversification protects your business from the “ups and downs” experienced by your customers due to a cycling economy.
It’s important that you establish solid lines of communication with your customers and stay up to date with internal and external factors that may be affecting them.
How can you do that? Do the one, or all, of the following:
Maintain good communication with your customers. If your customers are other businesses, stay in touch with the executive team or primary owners.
Develop your continuous improvement program to support innovation and product/service refinements.
Work to secure multi-year commitments and contracts with your customers.
Stagger your contract renewals throughout the year.
Price your products/services in alignment with your market.
Use your sales and profits measures to track your dependence on any single customer or customer industry/sector. Develop your marketing strategy to ensure that your customer base is diversified and balanced.
Now you have tools to avoid two more deadly mistakes that can cause your business to lose customers.
If you want to discuss any of the ideas presented here or want assistance with implementing the business scaling framework, reach out and let’s have a conversation.
Next week I’ll talk about the last of the deadly mistakes that can kill your business. In the meantime, here’s to balance!