Scaling a private company without an injection of capital is tough. Waiting for each new sale to generate cash, to allow the business to invest in new hires, new systems, and new technology is tough. So if you’ve successfully raised $1m or $20m or more, you can immediately execute. But what’s the priority of events. Here is a little set of guidelines for new management teams, or a health check for the seasoned professional team.
- Focus on the client. Get product/service in their hands. Work out the structure of your company based on keeping the clients happy. That will mean different things to different companies. I’m scaling three businesses at present: an early stage wireless mesh network technology company, an integrated HR, payroll and insurance outsourcer and a more mature capital equipment/technology group. Ensuring the company structure supports world-class customer service means different things to each of these portfolio companies. However the principal of ensuring product and service are delivered on time in a professional, insightful and human way is essential to all three owners.
- Be clear on the story you are telling to the market. Who you are drives the product you should be building, the people you will attract, the metrics you will measure, the marketing narrative on your website and on all your collateral. Take time to fine tune and nail this story. Communicate it across the company. Let it spread across your customer base and keep repeating who you are, every day.
- Scaling is so much more than growth. It’s about addressing dependencies. Dependency on the owners, on a few customers, on one product, or on one region. It’s about aligning roles within the business with what is needed today. It’s about bringing control and predictability to a world that resists both. Scaling is about de-risking the business not swinging for the fences. It’s about imagining a bigger business, but with the appropriate structures and playbooks wrapped around it to ensure that growth is sustainable.
- As you look to deploy this new money it’s really important to consider the symbiotic relationship between the corporate objectives and the departmental objectives of your managers. If these are not interwoven, you will fail. You will waste money. The big audacious goals will be missed despite the fact your team will look busy!
- Spend the time to build really smart financial models that will allow you to see the impact of policy changes. Models that really show the impact of changing scenarios on the cash flows, profits and balance sheets (tips for non-financial geniuses, remember the difference between two balance sheets taken at different points in time, can be explained by a profit and loss account and a cash flow statement).
- Build measurable, visible metrics for all your managers to allow them to measure success. Make sure they understand what a good week looks like.
- In my experience as you scale, it’s easy to get complacent about process. The sales process specifically is misunderstood. At the beginning of a successful period of growth it’s really important to understand why you are succeeding as well as why you are failing. All great sales deals (ones that build long term relationships as opposed to James Bond deals, where everyone is dead at the end of it) follow a process. They all follow a discovery of the facts, a diagnosis of what the right problems are to solve, the most appropriate solution for that client that you can delver and a flawless execution to deliver on the promises made.
- Now is the time to build the lead generation process. Measure all your marketing channels to assess not just the quantity of leads but the type and quality of them. I’m currently measuring, for one of my portfolio companies, the reasons behind leads that are dead on arrival. Why are prospects getting it wrong? Of course it’s not their problem, it’s ours.
- Communication with your investors is always a delicate matter. However getting ahead of the curve is key. What are the key dashboard metrics they want to see? Investigate what works for them. Understand why they believe this measures success and build these into how you run the business. Report on them regularly with stories that explain their performance.
- Communicate often and clearly to your team. Keep them in the loop. Give them a purpose, give them autonomy to perform and allow them to master their craft (Drive, Daniel Pink).
Remember this business opportunity might be the only one you get….. Make it count!
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