“Hero ball” trumped strategy for Oklahoma City, according to Charles Barkley, TNT commentator. Loaded with superior talent and leading the series 3-1, Oklahoma City’s individual style of play was overtaken by Golden State’s control strategy and experience.
This happens in business, too. If growth is not controlled, a company will experience its own series of turnovers, missed shots and eventual shortfalls. Consider these insights in order to stay focused on the end game, not just the remarkable shots taken.
Don’t be the only superstar
You can’t build a sustainable business without assists from your team. Business owners easily get caught up doing everything themselves. If growth is 20 percent year over year, it’s even more challenging to get away from the day-to-day tasks and problems. Build the right management team and trust them, so you have time to be the strategic thinker.
Sales growth does not solve all problems
Speed and athletic ability alone were not good enough for Oklahoma City. So is the case with rapid revenue growth without also focusing on margins and efficient operations. “Making it up in volume” is an old joke, but also is (unfortunately) true with revenue-driven owners. Ideally, you would have both increased revenue and profits, but if one has to be sacrificed for the other, revenue growth should win.
Know your numbers (stats don’t lie)
Coaches study film and look at shot stats before and after each game. Do you know your key financial ratios and their trends? To stay on top of your company and its future, develop dashboards of your key performance indicators (KPIs) and measure them. Successful businesses will create dashboards for daily, weekly, monthly and/or quarterly KPIs and share them with their teams.
Know your goals
Don’t get caught up in the thrill of rapid growth. It’s difficult to resist the prospect of new business from big projects and contracts, but make sure you are staying true to your company’s mission. Growing too fast can damage your cash flow, current customer relationships and employee morale.
Balance it all
Balancing the needs of a rapidly growing business – profitability, cash flow, quality control, new projects and employee needs – is a huge challenge. The best advice is not to do it alone. Many have been in your shoes. To speed up your learning curve, rely on your advisors and your own network of trusted business owners. Your accountant and banker have plenty of financial data about your business and can quickly point out strengths, weaknesses and opportunities. Ask to be introduced to other business owners who have successfully managed through the challenges of growth.
Growth is complex. When it happens, it can be difficult to manage. Remember to keep your eye on the court - not just the ball - and commit to your strategy. By doing so, you’ll be sure to find yourself in the finals.
To stay updated on financial topics relevant to business owners and self-employed entrepreneurs, sign up for our series.