We’ve Got More Than We Can Handle…
Mark Frasco - President
This will seem obvious to you, once you think about it: the best time to grow your business is when you don’t need to. My business is in the business of growing businesses, so I often get the opportunity to discuss and hear various thoughts on the topic. The statement that I don’t hear often, but more than you might think, is: “We’ve got more business than we can handle. The last thing we need is new business.” Like I said, I don’t hear it often, but when I do, I have to smile inside and think to myself, Good luck! Let me know how that one works out for you.
I’ve run and owned a number of small- to mid-sized businesses during my career. It is sad to say how many times I’ve looked at the reports and thought to myself, I didn’t focus enough on new business development (last month, quarter or year), and now I’m paying the price. With bruises fading and those experiences embedded in my learning, I can honestly say there are two itches that I scratch every day. First, what am I doing today to find new business? And then, what am I doing today to invest in preparation for that new growth?
How many times over your career have you enjoyed work in process, newly-booked business or the biggest nemesis – 95% committed prospects – only to hear that your customer or prospect is slowing down or pausing the work? For me, far too many times to count. There are many things we struggle to control on this topic, but one thing we have total control over is the installation and management of the structures and processes that continuously identify and position new business opportunities.
At COACT, my metrics are a bit easier to track than most of yours, but this might plant a seed or two. Every week, I measure my work in process, value of proposals, number of proposals, average age of those proposals and calendar-forecast closes, based on our historical performance. Our median gestation of sale is 50 days – from the time of introduction to signed agreement. Based on historical data, I know the percentage of those I introduce to COACT in March will be clients in May. During that period, I’m focused on investments needed to support that growth. Now, as interesting and maybe impressive as that sounds, it is very much an imperfect science.
Lacking any deliberate strategy and action toward new business growth, the future of the business rests largely on the whims of the economy. When it is up, we take far too much credit for the growth of our businesses and become complacent. When it is down, we move rapidly to smaller/faster, the painstaking activity of “right sizing,” leading to guilt and regret. This is often when we refocus our efforts on business growth structures and processes. Unfortunately, for some, it is too late. However effective their efforts are, regardless of how rapidly they respond, it is very difficult to meaningfully impact the gestation of a sale, without severely damaging margins.
There certainly are cases that would challenge my suggestions, but they hardly hit the radar for most of us. Some might say they can’t service the business they have in a quality manner. This is a real concern, but is a topic for future conversations – performance planning and management. To chase this rabbit down one more curve, I’m a fan of the concept of everyone being involved in business growth, but recommend that operationally-focused folks not have responsibility for business growth efforts. It is very difficult to expect the people who are responsible for completing the work to be responsible for finding more work. My experience is that these structures tend to sub-optimize one or the other – performance or growth.
In most scenarios, there is plenty of supply in the market for the demand that exists. The bottom line is that the best time to grow a business is when demand is outstripping supply. Some combination of events, some that you control and some that don’t, have caused disequilibrium. If the business is truly growing faster than you can resource, don’t discontinue strategic growth efforts, raise your prices or change your terms to restrict your wins to those that best fit your system.
How did your business growth results stall? One day at a time… one decision at a time.
*Note: This article was originally published in March 2015 and has been updated and revised for relevance.
Questions or comments? Please contact Mark Frasco at mfrasco@teamCOACT.com