Running a company is no easy feat. If it were easy, everyone would be doing it. It takes courage to start and grow a business.
According to the U.S. Small Business Administration1, there are approximately 113,779 small businesses in West Virginia, which make up 98.9% of businesses in the state. While this is a notable statistic, it’s important to acknowledge that approximately 20% of small businesses fail within the first year and, unfortunately, 50%2 fail by the end of the 5th year.
Various factors can affect the success of an organization. Whether it’s handling the impact of the coronavirus pandemic, securing financial stability, attracting customers, or identifying new markets to pursue, small business owners encounter many challenges. These obstacles can become accentuated during periods of growth and vulnerability. Therefore, small businesses need to implement and execute a strategy to help scale their business.
Strategy – A pathway to achieving your goals. Based on experience, research, input, and intuition. How will your business get there?
Scaling Your Business – Growing your business in a deliberate manner that allows for greater capture and market share, increased profitability, and efficiency.
When expanding your business, there are certain actions you must take – and certain actions you must avoid.
Dos
- Invest in your people
Whether you’re selling products or services, the foundation of your business will always be the people that make it happen. Therefore, it is critical that every business invests in their people by building a strong employee culture that rewards ‘doing the right thing and doing things right.’ Develop your leaders and managers to be good to others and foster a high-potential environment. Train your employees to be subject matter experts and/or highly skilled technicians. A strong employee-focused company will thrive.
- Surround yourself with a strong advisory Team
I call my informal advisors, ‘The Kitchen Cabinet.’ These folks are trusted advisors that have the experience and the moxie to tell me the truth, no matter how harsh it may be. They bring business value and care about me and my employees, all for the low price of a coffee or pint of a local brew. My formal advisory Team consists of a CPA, Attorney, Brand Expert, Media Consultant, and Publicist. While they don’t work for the price of a latte, they’re worth every dime. As you scale your business, the need for professional services will grow. Remember, no entrepreneur is an island.
- Be Bold!
As you expand your business, it is imperative that everyone on the Team identifies and operates at their high value of contribution. When it comes to innovation and creativity, be BOLD, and reward others for doing so. Competition is fierce, and only those businesses that can differentiate themselves will enjoy the privilege of growth. By developing an atmosphere that encourages positive change and challenges the status quo, ideas and solutions will stay fresh and relevant.
Don’ts
- Fear Adjusting the Sails
Courage is one of the most important characteristics of being an entrepreneur. As you consider growing your business, you must have the courage to make adjustments to the business model and changes to the Team. One of the most important challenges that a company faces when it expands is ‘rightsizing’ the Team. Investors call it ‘Asset Reallocation.’ Sometimes… okay, most of the time, the people who help the business get started are not always the same people who can help the business get to the next level. So, creating new opportunities for others may be the best thing for the business and the Team member.
- Be all things to all people
My friend Jim says, “You must differentiate an opportunity from a distraction.” When starting a business, we just want that proverbial ‘first client,’ and will do anything to get the business. Unfortunately, that approach is not sustainable. While looking for opportunities to expand, it’s important to remain committed to the vision of the business and leadership. By staying true to who you are, the purpose of the organization will remain strong and instill confidence in all stakeholders.
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Overspend
During the initial phase, more than 50% of small businesses3 rely on the entrepreneur’s personal investment. Many businesses try the ‘build it and they will come’ growth model. However, it is important to set reasonable and measurable benchmarks that will keep your business’s expenses in line with revenue and margin. While smart borrowing is encouraged, spending should always be balanced by the ability to make money and service the debt. Capital expenditures are one of the most common factors in business bankruptcy. Stay humble, and when it’s time for bigger and better, you will know.
About the Author
Currently, Frank serves as President and CEO of Forge – a Certified Veteran Business Enterprise headquartered in Morgantown, WV. Forge provides a variety of professional services, such as strategy development and execution, government and community relations, business development, and organizational growth support.
Frank is a graduate of Valley Forge Military College, where he earned a degree in Criminal Justice and served as the Regimental Sergeant Major of the Corps and Class President. Later, he attended West Virginia University, where he earned a degree in Sociology and a master’s degree in Business Administration (MBA).
With more than 17 years of accumulated service as a member of the U.S. Army and West Virginia National Guard, Frank finished his military career with the rank of Captain.
Presently, Frank and his wife Ashley reside in Morgantown, WV, with their son Maxwell and twin daughters Isabella and Cecelia.
References
Author: WV SBDC Subject Matter Expert – Frank Vitale, MBA
August 20, 2021