Having been involved in different transactions ranging from small businesses to listed public companies and some owned by private equity houses, I have tried to find themes or threads to help grow a business.
Over many years, one aspect has stood out in helping business to grow quickly and more importantly profitably plus in a manageable way.
Running a business which feels like holding a tiger by the tail is not a sustainable strategy.
On the basis that your business has a good product or service, you are motivated, you are building your team and you are making a profit (not enough, I know, but at least you are making one!) one area of dedication and focus will reap rewards in the short and medium term and, somewhat mind-blowingly, will also help you to sell your business one day.
What is it and what is the word you need to have (metaphorically) tattooed on your inside forearm? It’s GRANULARITY.
What do I mean by granularity and how will it help you?
You may say I already know my business inside out and every aspect and that your financial accounts are very granular but here is the challenge.
By interrogating (and I use the word deliberately) every single aspect of your business and not just the financial aspects, you will shine a light on areas where you can make incremental improvements – in operational, customer service, product or service and financial areas.
There are millions of examples but sometimes easy ones are the quick wins. How do you receive enquiries? Email, social media, website or good old fashioned telephone calls?
I will bet one of those channels works fine but even you, as the owner, admit it could be better – maybe it’s slow, clunky or just downright awkward.
Granular interrogation of the whole area will drive you to improve and guess what? It will feed, eventually, into your profitability and it will increase sales.
There are always other areas which feed into growth and although owners often think I just mean cost-cutting, I apply granularity to sales.
In terms of customers, quite often, we are not charging as much as we could or should.
Now the easy fixes and quick wins are great, but the theme I have seen in the most successful businesspeople who have amassed fortunes when selling their companies is that they continuously interrogate and granulate their business.
Once you’ve finished with your incoming enquiry channels and customers, let’s have a look at your suppliers.
Genuinely, how often do we continue using suppliers who are not as competitive as they could be but who just make life a little easier? We are not in business for easy and I don’t care how you find it, but if you can find £100 per week (lower broadband costs, more discount by buying in bulk, changing a supplier) then that’s £5,000 each year and typically £50,000 on your final selling price.
Just think, if you have some scale and could find £2,000 per week – that’s £100,000 in your pocket each year and £1m more on your selling price.
Get down and dirty with your own business – nobody knows it as well as you and you will love it all the more when you truly know it inside and out and it’s worth more.