The beginning of July always seems to me a good time to sit down and read through my business plan. It’s amazing how much things can change over the course of six months – and how far off your forecasts (guesses? hopes?) could be. I always take the opportunity to do a little remedial work on the plan, to bring it into line with the current situation.

Last year at this time, I was doing the same as most of my clients – taking risk out of the business. It’s a sound strategy in uncertain economic times – carefully manage cashflow, and spread out your customer base so that the inevitable thinning doesn’t cripple you.

This year, the watchword seems to be cautious growth. That usually involves two major concepts –

1) figuring how to add resources as needed. The contracts with optimistic hiring & expansion in more certain times.

2) Managing customer satisfaction & retention in the face of new resources. Really this strategy allows you to hang onto what you’ve got.

Most companies get the first part intuitively. The labour market has changed to the point where contract employees are common, and allow for cost-effective expansion/contraction. Where the majority seem to take a hit is in keeping customer satisfaction high while they grow. New staff usually don’t have the ownership of accounts which the clients take for granted. Carefully managing this during the early stages of growth is critical to retention strategies. It is worth turning away new business for a few months while you ensure continuity of client care. That’s a hard choice, but one you will later acknowledge made your growth stable.

When I first became a growth specialist, one of the studies I read really took me by surprise. It was in the booming 90’s, and was not a popular viewpoint. But it contained a hard truth we all wanted to overlook. I’ve long since forgotten the original source (I wasn’t as diligent in documenting this back then), but rather than try to take credit for this wisdom, I’ll paraphrase:

“Companies which grow revenues in excess of 20% annually for three consecutive years, invariably face a crisis of customer satisfaction. Unless they manage account ownership rigorously, dissatisfaction levels will result in a significant loss of their most lucrative customers. It isn’t uncommon to see 4th year results where revenue continues to climb, but profitability margins become paper-thin.”

Cautious growth. Maybe I should just call it sustainable growth. Either way, its how I’m touching up my business plan this summer.

Share this

Latest Insights

Recent posts from our blog

How to plan for seasonal variances in your cash flow

Have you noticed unexpected seasonal variances in your company’s cash flow? If your business is seasonally-based (a lawn care or snow removal company, for example), it’s normal for your cash flow to vary depending on the time of year. Unfortunately, many companies who shouldn’t be affected by the seasons still experience peaks and valleys in […]

Organizational growth and restructuring: Is your business ready to take the next steps?

Are you planning to take your business to the next level? Before you start growing your company, you need to ensure that your organizational structure is prepped for this major shift. Don’t just jump in head first – make sure you follow our key prep tips to keep your growth sustainable and successful.   3 […]

Do you have a file you need to send to us? Would you like to make a payement?