As the economy continues to recover, many businesses are considering growth strategies, says Dustin Rohrbach, vice president at Danis Columbus, Danis Group of Companies.
“Corporate expansion is one of the most serious steps that can result in tremendous success or fail miserably. The outcome depends entirely on your experience, the amount of time you spent on planning and your understanding of business processes,” he says.
To ensure the success of your expansion, Rohrbach shares these best practices to put you on a good path.
Commit long term
In order to be successful, management must increase resources instead of turning to existing sources for business expansion.
Don’t saddle existing employees with more duties. All that does is take time away from the business they are already supporting and undermines the commitment to the development.
Plan for the expansion by committing the assets needed to support the expected growth.
Use profits, not revenue, to fuel expansion
Knowing your finances is extremely important. Strong revenue is not always a true indicator of a profitable company.
Long-term, healthy business expansions are a function of profit, not revenue. Your ability to expand is directly tied to the amount of profit you can invest in the expansion. Trying to expand using revenue is a short-term strategy that can backfire in a hurry.
Form trusting relationships with outside resources
The intersection of developing the right relationships with the right people is key for expansions in business or capital investment in a new building.
Facility managers and business leaders need to have the correct contacts, whether a banker who knows their situation and can offer the best terms, an architect who delivers creative ideas acceptable to all parties or a construction management group that can handle complex construction needs. Develop the right relationships now to be able to utilize proven expertise in the future.
Forecast the industry and time expansion accordingly
Don’t let timing stop you. You need to have a good sense of vision for where your industry is going, so time your expansion accordingly.
In the early 1990s, health care construction wasn’t as vibrant to the construction industry as it is now. Today, this industry has undergone a shift to much more complex building needs with complicated construction and engineering requirements.
Never rest on your laurels
Businesses must reinvent and reinvest in order to stay current.
“What worked today might not work tomorrow,” was the consensus of an IBM survey of corporate CEOs.
The study reported that more than two-thirds of the respondents said extensive changes would be required. And in these economic times, some CEOs are already looking at business model innovation to address permanent shifts in their market landscapes.
Rohrbach has one final thought to embrace when expanding — there will be doubters.
“Ignore them and focus on the upsides of building your business,” he says. “If nothing else, the process will keep you sharp and demand constant attention to the needs of your customers.”