A company’s success is based upon the company’s ability to sell, produce and control cost.
Business growth occurs when the company successfully markets and sells products and/or services, at a price that exceeds the cost to produce, with enough surplus profits to cover overhead and allow for reinvestment.
Companies are dynamic organizations comprised of numerous functions and disciplines. Infrastructure refers to the organizational layout, its underlying processes and internal communications. Departments such as finance, marketing, sales and human resource exist in a corporation whereas in a small company such disciplines are broadly defined.
A weakness in one discipline can hinder the growth of the entire company. If sales or marketing are lacking, the company cannot reach revenue targets. If the company lacks financial acumen, profitability will suffer and cash flow may not be available for investment. If leadership is insufficient, the company will operate without strategic direction.
For this reason, small companies need to make sure they have employees with experience and expertise within the main functions. If needed, fill in gaps by using contract labor. When all business functions are being addressed properly, a company can achieve what appears to be overnight success.
Implementing solid company processes and procedures is the first step to growing a company to the next level. An aggressive sales push without the corresponding infrastructure development can lead to quality issues and missed deadlines. This could cause more harm than good as it is much harder to fix a bad reputation.
It is important to establish “departmental thinking” from the very beginning, even if your company is only a few people. Any size company can benefit from developed rules and procedures implemented on day one. Processes lead to efficiency which results in increased profitability
As a small company grows departments eventually began to take shape and processes are created. Unfortunately the impetus is often the result of some error that had occurred. The product was shipped (again) without collecting a deposit. It was determined that a verbal “okay” from finance is no longer acceptable and a sign off procedure prior to shipping is implemented. Although this is how procedures are commonly developed, it is not the best route to follow as it cost the company both time and money.
To learn more about how to grow company growth visit www.BusinessSimplyPut.com and look for the eBook titled, “Planning Your Company’s Growth A 10 Step Guide to the Strategic Planning Process”. A FREE Coach Note is also available for download.