Checklist for expanding SMEs
Published on 26/10/2016 in Innovate
“Business is good, our turnover is rising”, a SME Manager might say. First and foremost, that is great news. But growing is more than just generating more turnover. There are also aspects that call for adjustments in vision and strategy. Otherwise, the celebrated growth can take on counterproductive proportions. Here are five tips to prevent growing pains.
Always start with a clear mission statement
As a business leader, you have to define your company’s calling (the ‘why’). In other words: formulate a vision of what you want to achieve as a company. On the basis of that, you define your strategy and draw up your business plan. Growth should ideally be a strategic choice, and hopefully not purely a favorable concurrence of circumstances. Every company, and especially growing companies, must regularly revisit and review their mission statement, strategy and business plan. For that matter, you could deliberately decide, as an entrepreneur, not to grow.
Kristof Van Lommel, TDL Group: "We specifically say in our mission statement that we want to grow steadily and we are aiming for sustainable profitability with controlled risks. We check all our strategic choices against this. So we focus on long-term partnerships with our customers, so that we can grow with them as a flexible logistics partner.”
A growth-documented business plan
Growing means that you have to constantly look for new, useful information. First record all your current capacity, in terms of production, transport, infrastructure, raw materials, stocks, people, teams, knowledge, relevant experience, etc. Carefully analyze what financial resources you need to expand and in which part of the business.
But it is not only what is present in your own company that is relevant. Be sure to look outside, as well. Explore possibilities for new product developments or process optimization, opportunities for cooperation that lead to additional business, etc. And, of course, constantly gather information about the target market, your customers, your competitors. That way, you can include well-documented growth steps in your business plan.
Johan De Neef, Smart Packaging Solutions: “In 2008, we took over a company that had gone bankrupt. This provided additional production capacity that we needed. It also provided extra technical possibilities that we did not have. So we were able to tap into a wider market. The workforce increased from 45 to 130.”
Formulate clear growth objectives
Put your strategy into practice by setting clear operational goals. Determine KPIs (Key Performance Indicators) for your growing company and allocate them to departments and people. If growth is an objective and you manage to establish clear measuring points, it is vital to communicate these clearly and transparently to the people and departments who are responsible for them. Offer your people the opportunity to grow alongside your company. That means giving them a voice and paying attention to their involvement. Think about it: there’s no growth without motivated staff. Growing also means proactively recruiting qualified people. The more attractive your company image and the clearer your objectives, the easier this will be.
Philippe Metz, Intys Consulting: “I put growth mainly down to the corporate culture. The market has reacted very positively to our approach and, in consultancy, that’s not really a given. Thanks to our corporate culture, we can bring the best talents on board and keep them.”
In these disruptive times, you have to be able to make change an advantage. Those who are most agile and flexible will have a head start over the competition. So you shouldn’t shy away from it. Quite the reverse, in fact, if you aim to evolve as a company and implement changes. The trick is to embrace change and use it as a competitive advantage. Once again, remember to inform your staff adequately and in good time. Because resistance to change can be a serious obstacle to your future growth.
Bart Claes, JBC: “Change is the new reality. Digitization is turning a lot of business models inside out. Five years ago, virtually no clothes were sold online. Today this market is growing enormously. By adopting an integrated on- and offline approach, we keep on growing.”
Always think about your PROpt for open communication with your staff, the community in which you operate, the authorities, the financial world and others. Make it clear to everyone what your company is about and where it aims to go. Moreover, this communication must be a two-way process. That means you have to take account of the feedback from your customers and potential customers about products and services, new concepts, your brand image, your points of sale, etc.