Turning the Plan into Metrics:
In review, ask these questions as you ponder expansion strategies. The metrics of success can be teased out of these questions.
- Do employees have the necessary skills to support your growth strategy? Will you need to hire new staff or provide additional training?
- Can existing operations handle a sudden boost in demand?
- How will you maintain service levels while reaching for new business? Are current operations, including order management, customer service, record keeping, and inventory control, running smoothly and ready to take on more?
- Where’s the money coming from? Will cash flow from sales be enough to support your expansion, or will you need lender or investor financing? What will you need the money for? Study historical cash-flow statements as a guideline, then determine cash-flow needs on a weekly, monthly, and annual basis to plan your funding strategies.
- Are you ready to delegate more tasks and give managers more control?
- Does expansion rest on a reliable mix of intuition, solid competitive analysis, and customer research?
- Do you have a time-defined exit strategy if expansion plans fail?
Here are some measuring sticks that you can use to measure your growth. Are you really successful? Plenty of cash is not always the best measure. Where you see gaps, find ways to improve in those areas. Reassess weak areas from a non-core or core competency angle. Is the weak area something you can outsource?
- Compare how long it takes to create the product and get it to market vs. how long it takes to receive the full payment for it.
- Calculate the profitability of your product or project.
- Measure the time and effort it takes (including all of the steps) to initiate and complete a sale.
- Analyze your top five customers and why they buy from you.
- What is your staff turn-over rate? What is your staff absentee rate? What is your workplace health and safety record?
- Is your information technology and computer system sufficient to handle your business growth? Can you measure the effectiveness of newer technology vs. staff efficiency and customer satisfaction?
- Has the number of customer complaints increased or decreased over the past year?
- Conduct an employee skills inventory.
- Go back to your financials and cash flow projections. If changes are needed, can you afford them and conversely, can you afford not to attract and build new people, policies, procedures, processes to move ahead?
External Drivers and Indicators
It’s not enough in the business world to have your gaze averted inward — you must assess changes in the external business environment. Watch for changes in the following areas:
- Canadian dollar
- Consumer price index (CPI)
- Customer demographics
- Employment and unemployment rates
- Financial markets
- Gross domestic product (GDP)
- Information technology
- Motor vehicle sales
- North American economy
- Retail sales figures
- Supply chain dynamics
- World economy and geo-political elements