When your small business finally begins to experience success, it’s time to celebrate. Drink some champagne, take a couple of victory laps around the office, and eat some donuts — but after the celebration, roll up your sleeves and get back to work. Now you need to build on your achievements to guide your business toward strength and stability for the long haul. Here are some actions you need to take at this juncture.
Manage Your Margins
Image via Flickr by kenteegardin
In the early days of business building, entrepreneurs commonly think of any sale as a good sale. This can make sense when your goals are to build awareness, accumulate customers, and stimulate word-of-mouth referrals — especially during that “seedling” stage when you’re expecting to operate at a loss. As you approach profitability, though, it becomes very important that your sales aren’t costing you money.
How to do it: Know the break-even price of every product and service in your line, and make sure your sales reps know the limits of their negotiating powers. Use your bookkeeping system to track every transaction by its associated job, product, or service, then scan those reports monthly to watch for red flags. Put more effort into your most profitable work, and if a pet project isn’t pulling its weight, either fix it or pull the plug before it can drain you.
Focus on Long-Term Potential
Businesses that start small can grow exponentially if you develop streamlined systems and profitable methods. After all, McDonald’s didn’t invent the hamburger — it just systematized its sale. Here’s a current example: Darryl Katz started out with a local drugstore and parlayed its success into chains of stores across the United States and Canada. Now Katz, who is a billionaire, has shifted into the entertainment and sports industries.
How to do it: Keep streamlining and systematizing your business. Think about how things might run if you grow to 10 times your current size, then run things as if that has already happened. Keep trimming unnecessary tasks and steps in the system so that you and your staff are spending your time on the most profitable activities.
Keep Your Thinking Fresh
When you started your business, you were probably thinking outside the box and coming up with fresh solutions every day. As you move from fledgling startup to established business, your innovations will naturally slow down. You have to actively seek ways to keep bringing new solutions to old problems.
How to do it: The answer is to embrace change and think about growing your business as a process and not an event. Think big, and seek opportunities to shake things up and keep things moving forward. If you hear yourself saying “We’ve always done it this way,” then make a point of consciously opening your mind to whatever change you are trying to prevent.
After your business becomes successful, you need to build on that success, not rest on your laurels. Now is the time to push forward and take your enterprise to the next level.