The Seven Secrets to Highly Scalable Companies

Larry O’Connor and Brian Landis

By: Larry O’Connor and Brian Landis - Executive Director and Managing Director, Butler Business Accelerator

Category: Business Growth

Many mid-market companies in Indiana never achieve that next level of success because their owners have not planned for growth. Those companies’ leaders remain “business operators” instead of becoming “strategic CEOs.”

There are seven secrets that separate the businesses just making ends meet from those enjoying incredible success. These secrets are known as “The Seven Secrets of Highly Scalable Companies.”

Continued Below...


1. Develop a strategic plan.
Strategic planning identifies multiple strategic thrusts and initiatives toward greater competitiveness, growth and profitability. True strategic planning must be completed by people who understand the business and the industry in which the company competes. It involves developing the catalysts of great ideas — strong strategic initiatives that will catapult the firm to the next level. The company must offer incentives for people to achieve the plan, and to not be in conflict with it. By doing so, business owners invite and celebrate success.

2. Increase the company’s return on assets.

There are three ways to improve a company’s return: increase revenue, decrease cost, or improve the company’s ability to leverage assets to create a greater level of profit. Strategic analysis determines how things will be done differently tomorrow from how they are done today to improve the profitability of the company.

3. Know your company’s cash position.

Financial discipline strengthens the image of the company with its bankers, who can provide additional capital as needed. Outlining your cash position also identifies all the assets of the company available for strategic moves, which can further fuel growth and generate additional profits.

4. Improve your marketing.

Marketing is an investment, and, like any other investment, its return can be measured. An effective marketing strategy can increase customer retention, revitalize distribution networks, improve the effectiveness of sales expense and differentiate the company from its competition. A sound marketing strategy that considers the company’s environment, capabilities, brand and product positioning can also increase the return on investment for marketing services.

5. Leverage resources outside your company to get work done.

Leverage refers to how a company can take advantage of resources outside of its borders to get work done productively. Whether you decide to outsource functions at a lower cost than are possible with internal resources, or you take an innovative approach to category management utilizing existing suppliers, you can increase efficiencies and leverage within your organization.

6. Improve your business processes.

Managing strategically requires an owner to develop a corporate strategy and implement the strategy through people, business processes and technology. The owner must identify gaps in the business processes, prioritize ways to fill those gaps and use technology to improve and provide strategic advances. Since resources are always at a premium in a mid-market company, the business owner needs to determine strategic moves that can be done at the lowest cost for maximum effectiveness.

7. Grow your organization in line with the business.

When a business owner begins a company, all of his or her thought goes into the successful execution of the business model. As the business grows, the owner begins to put others in key functional positions while continuing to keep a finger on the pulse of the operations. If the business owner cannot transition the organization so that it is driven by business processes with formally defined performance measurements in place, he or she cannot drive the business to the next level of growth.

When should business owners grow their businesses? That will vary from one business to another. But when the time is right, apply these secrets, and success will inevitably follow.

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