The growth of an SME is not just a story of sales volume. There are several factors to consider, at different stages of the process. Here are four expert tips to keep your business growth from going off the rails.
It is very important that the entrepreneur, before starting to grow his business, asks himself why he wants to do it. “This step focuses on the mindset of the entrepreneur and his team. You have to be available to be challenged,” says Jorge H. Mejia, associate professor in the department of entrepreneurship and innovation at HEC Montreal. It will be important to listen during growth, that is to say, to listen to your employees about their concerns or their desires. Both the entrepreneur, the employees and the SME as an organization must be ready to grow. “This means questioning the skill set we have, and also considering the possibility of learning new skills,” he adds.
The second stage of growth is called “growth in action,” according to Professor Mejia. “One of the challenges of this stage is to avoid falling into the growth trap, which consists of fixing our attention only on the volume of sales,” he illustrates. The increase in sales [must] translate into profit for the organization. » To do this, we must also pay attention to “new markets, the increase in capital, income and employees”. Traditionally, very small businesses operate in an “informal” way, as they rely heavily on close relationships. The entrepreneur will therefore have to change his mindset and opt for a more structured, more formal organization, so as not to lose track.
There is no perfect pace for business growth; That would be way too easy! On the other hand, there are variables common to each of them, such as the importance of ensuring good communication between its different departments. “We must not work in silos,” insists Jorge H. Mejia, who is also director of the Observatory of the National Bank Entrepreneurship Institute – HEC Montreal. Marketing, sales, and production teams all need to be in sync, or your growth can really fall into the ditch. Another factor: “The owner’s ambitions can sometimes be too high. The rest of the organization can’t keep up with him. You have to have this awareness,” advises Professor Mejia.
Once growth is well advanced, or even almost reached to your liking, it may very well be that a competitive company wishes to make you a purchase offer. This may particularly be the case if, in addition, you have values similar to those of the competition. “You have to be prepared,” says Jorge H. Mejia. Most entrepreneurs don’t even ask themselves this question and when it arises, they have not done a tax assessment of their assets, i.e. their resources and skills. And sometimes the offer is much lower [than their real value]. So I recommend doing something that is very difficult for a CEO, which is to step back and ask yourself: “What is my value before, during and after growth?”
