Planning for Growth in 2022? Critical Considerations
By Douglas Zeisel, TCV Growth Partner
If you are a CEO or founder and you want to see aggressive growth next year, you seriously need to consider these questions and make sure you know the answers.
Market Considerations
Is your company in market alignment? If so, then you have a well thought out value proposition that is consistent with what your customers need and want. If not, then it is time to survey your customers to ensure you are solving critical problems. Your company must be closely aligned with the market into which you are selling. That means your company is well positioned to address the wants, needs, and hopes of your customers.
Are you in a defensible market position? I hope you are not competing solely on price because if so, you better be able to constantly drive down the costs of delivering your product or service because your competition surely is. Hopefully your product or service have added benefits or features that are hard to duplicate and set your company apart from your competition. Hopefully your customers want to do business with you because that value proposition is so strong that they are loyal regardless of slightly higher pricing. Can you make your product or service unique in some way? Can you be the first to add desirable features?
Management Questions
Growth requires having the right people in the right places at the right time to ensure the timely delivery of your product or service. In addition to adding new Business Development people, you will probably need to add customer support personnel as well. And those increased revenues will also mean that your Accounts Receivables are going to need management. And consider who will manage the various departments that will be needed to keep the business functioning like clockwork. Is it time for an update of that Org Chart?
Operations
The more you can systemize your operations, the more efficiently you can provide that product or service your customers desire. At the very least you should have an accounting system such as QuickBooks that you can use for invoicing, payroll, and entering invoices you receive. Hopefully you have a CRM to manage sales leads and monitor progress thru the sales process. If not take a look at Pipedrive, a low cost CRM for smaller companies. And consider workflow automation software such as Airtable that you can actually integrate with your accounting system to create a custom ERP system at low cost.
Money
Do you have the financial resources to grow? Growth requires cash. All too often companies fail to anticipate how much cash will be needed to finance operations before those extra revenues kick in. And they fail to consider how much working capital will be needed to finance the increase in accounts receivable. Have you done monthly projections that include cash flow? Do you have a source for funding the anticipated growth? If your company is profitable, you may be able to secure bank financing. Otherwise you will need funding from a source that is consistent with your stage of growth. Are you aware of your options for funding growth?
Leadership
A sound growth strategy includes paying attention to leadership to ensure the whole team understands the company’s mission and each person’s role in achieving that mission. Do you hold regular team meetings with key managers to inform them of company progress? Do you lead team discussions about the progress, obstacles, and solutions facing each department? Do your managers understand how their department affects the overall company performance? Do they have key metrics to measure achievement? And are they properly incentivized to perform? Finally, don’t spend all day in your Ivory Tower, get out into operations so that the boots on the ground know you care about what is going on.
Momentum
While there are many companies that have stable revenues and run on autopilot, the chances of them surviving over a longer term are slim because some competitor is focused on growth. Growth that will come at your company’s expense. Surviving and prospering requires maintaining forward momentum. So you really need to have an executable plan for growth that encompasses all of the aspects discussed above. Developing such a plan takes time and effort. It is not something that can be created overnight – it requires a thorough assessment of your company’s current situation and opportunities for growth. Executives that want help formulating a solid growth plan should consider joining the next SCALEUP Maryland cohort which begins January 21, 2022. Get more information HERE. For more personalized assistance the partners at TCV are ready to help - Contact doug@techcomventures.com