As a business owner, you need a plan for just about everything you do. Obviously, you need an overall business plan, which includes a plan for your financials, marketing, social media, recruitment and crisis management. Part of your plan should also include growth. Yes, that’s right, you have to have a plan for growing your company.
Sure, if you do a good job, growth will happen naturally. But what if you don’t grow fast enough? Or worse, what if you grow too fast? If you’re not prepared for it, rapid growth may lead to failure.
Like anything else with your business, incorporating a growth strategy into your overall plan is essential to your success. Sometimes, though, that’s easier said than done.
To help you plan for growth, I solicited advice from a handful of successful contractors — Chris Hunter of Hunter Heat & Air in Ardmore, Okla., Sam De Angelis of Colorado Climate Maintenance in Englewood, Colo., Wade Mayfield of Thermal Services Inc. in Omaha, Neb. and Carmine Galletta of GalletAir Inc. in West Babylon, N.Y.
Here’s what they had to say.
How do you incorporate company growth into your business plan?
Hunter: We incorporate growth each year during our planning session. We analyze past years and anticipate the growth for the coming year. We also look ahead for the next five years. This includes manpower requirements and adding positions to our organizational chart that’ll need to be filled.
Also we set a timeline and procedure for when we’ll need the new person, plus any additional vehicles and tools we’ll need to purchase. From there, we can anticipate training needs and the marketing it will take to achieve that growth.
De Angelis: It’s important to be aware of the ratio of total sales to field staff, and know what it takes to support the field staff. You also need to have the office staff required to properly support the field before you add field staff. Identify how much more in total sales it will take to support additional field and office staff — and be prepared to sacrifice profitability during the growth phase.
Mayfield: Don’t over invest into growth, better known as hope growth. “I sure hope it gets hot,” or “I sure hope it gets cold.” Instead, use data to show year-after-year growth and plan your budget based on historical facts of growth rate.
Galletta: Make certain the company is financially sound. Look toward the future while following past and current trends in the industry. With growth comes cost — be it more employees, service vehicles, insurances, etc.
An accurate quarterly accounting spreadsheets helps give a visual snapshot as to where the company’s spending is happening, and also offers insight into where the company is losing business or where growth is occurring. Having real numbers in front of you speaks volumes — don’t use guesswork.
What’s your best advice to a contractor who wants to grow his/her company?
Hunter: Ask yourself why you want to grow. Some contractors think bigger is better, but growth just for the sake of growing can bring about more headaches. Growth to help accomplish your mission or growth to enhance the lives of your team and customers can be a good thing, if it’s intentional and part of the plan.
Plan what you need to do to achieve your desired growth. How many additional team members will you need? How many maintenance agreements will it require to support the additional team members?
Set goals, train your team, launch the marketing and do what it takes to make it happen. Take the time to plan the work, and then work the plan. Enlist the help of your team as well … teamwork makes the dream work!
De Angelis: Make a plan and get started. Growing your company allows for much more flexibility in the future.
Mayfield: Be smart. Grow profits before you ever try to grow sales. Sales are expensive, so your net should be a double digit before you invest in sales growth. This protects you if the growth isn’t there. Too many businesses try to grow on small profits, which is a mistake.
Galletta: Growing a company is more than simply advertising, soliciting new customers or offering new or additional services. A company that provides a great service has no choice but to grow.
One of the most important things is to have skilled people who can provide professional service to your customers. The mindset of most successful business owners is that they want to continue to see their business grow, but remember, with growth comes greater responsibility and commitment. You must be ready for that commitment.
Commitment to growth and following through is easier said than done. Business is similar to a competitive sport, you must have a highly trained team, get a plan and execute that plan every day or you will lose the game.