The key to long term sustainable growth is a stable and profitable client base. An established client base that delivers strong profits over time is the foundation on which the long term growth goal is achieved.
Where to start?
The start point for the growth strategy is an audit of the existing business. The audit should generate a report that defines the current state of the business. It should cover:
- people
- performance
- profits
Under the people heading the audit should investigate the people or relationships both internally and externally. Does the business have the right sort of clients and services upon which to build its growth? Are the employees ready to take on more?
As far as performance is concerned, are the management systems and processes in place and delivering the value add that they should. Are the monthly management accounts in place, are costs under control.
And finally, is the business making a profit. If not, then the single most important task is to determine which side of the business equation needs tackling. If it is costs, then be ruthless in cutting out any unnecessary expense, trim the fat to expose the lean. If the problem is individual client profitability, then deal with each one individually until the margins are within benchmark percentages. Finally have a long hard look at the management structures to see if any further trimming can be achieved.
Once this is done the profits should look healthy enough to start the new business development programme - more to follow.
But what if the business is not in profit. Should it embark on a growth strategy? Only in dire circumstances should a company embark on a growth strategy if the base is a bit flaky. It would be far better to restructure to get the profits right and then go for growth.
