Setting the right business goals can mean the difference between small business growth or stagnation. Once you pinpoint your intentions, you'll gain a better understanding of the challenges you may face on the path to reaching them. For instance, if your primary objective is revenue growth, you will want to have a plan in place to manage cash flow, accommodate for slow periods and have a team dedicated to supporting your goals.
Some small- to mid-size business owners set quarterly, monthly, weekly and even daily revenue goals. For example, a contractor may decide he wants to make $1,200 per day in the coming year, which would equal nearly half a million in gross revenue, up from the $250,000 or so he'd made in years past.
So, how can your company accomplish your business growth goals? The key is managing the factors that affect gross revenue throughout the year to help compensate for slow periods and ensure access to the capital you need during busy times.
Put the right people in the right places (and keep them happy)
A contractor would find it hard to achieve $1,200 in gross revenue per day without a hard-working team to complete the labor. Training people takes time—and as the saying goes, time is money.
It's best to have a well-trained team in place before you enter a phase of rapid growth and keep them engaged with fair pay, robust benefits and a supportive work environment. Keep in mind, in today's competitive environment, it can be hard to find qualified or specialized resources. You'll need a plan in place to have those individuals embedded in your organization before your rapid growth phase kicks in.
You may also consider outsourcing ancillary business functions. You can expand your accounting, marketing or design teams as needed using independent contractors, saving money on salaries, benefits and office space. If the workflow slows down, you can scale their work rather than finding tasks to keep them busy in an office.
Invest in marketing
Have you considered how you will reach your daily, weekly or monthly revenue goals? It is important to remember the adage purportedly uttered by Henry Ford: “If you always do what you've always done, you'll always get what you've always got."
In other words, if you run your business the way you always have, it will take a rare feat to substantially increase revenue.
Meet with your team to brainstorm new ways to drive business through inbound marketing, local networking, mobile advertising, sales or any other strategies and tactics you have not employed in the past. It can be challenging to calculate the return on investment (ROI) for marketing because leads gathered now may not yield revenue for months.
In fact, a recent study shows that nearly half of small business owners did not calculate their ROI for digital marketing, including paid search, social media, and content marketing at all.2 Of those who did, however, 42 percent were moderately to extremely happy with their return.
Done properly, marketing will net gains in the future, contributing to your overall revenue goals. Online furniture reseller, Article, increased sales by 56,581 percent in the past five years to be named Growth 500's fastest-growing company for 2018.3 Social media marketing that includes professional, magazine-quality images, ad targeting on Facebook and Instagram, and proprietary marketing software all played a role in the company's exponential growth.
Simply put, when you are aiming for rapid growth, don't be afraid to spend money to make money.
Accommodate for seasonality
Of course, while you may expect additional sales to follow a successful marketing push, it's important to time your campaigns for the best chance at a high ROI. Seasonality will affect some businesses more than others. For instance, retailers can expect a spike in the fourth quarter, while a roofer can expect more work in spring, summer and fall. Landscapers in eastern provinces will essentially stop work during the cold winter days.
If you've set revenue goals, you will need to take these dips and spikes into account and determine how you will compensate for the revenue loss during the down months or how to double or triple revenue during peak times.
Have cash available to accommodate growth
Accommodating seasonal spikes during periods of overall growth may require access to more liquid cash than you've needed in the past. If you've already doubled your average weekly business during a rapid growth phase, it's not unreasonable to expect growth four times that or more during busy periods.
Employ business tools such as cash flow forecasting, so you will always know where you stand. Don't hesitate to make the purchases you need to maintain your business growth. You don't want to miss out on opportunities because you don't have cash on hand to invest in the supplies or equipment you need.
By strategically timing payments to your vendors using your American Express Corporate Card, you can maximize your cash flow, using interest-free days to your benefit while also earning rewards you can use for office supplies, travel or even to put cash back into your business.
You can also consider adopting virtual payments like American Express vPayment® to make the process of paying and getting paid even more efficient which will help you simplify and have more control over how you manage your cash flow.
Stay on the path to achieve your business goals
Business goals should be measurable, attainable and relevant, which means reaching your target will have a positive impact on your business. Setting revenue goals is an effective way to grow your business. Partnering with vendors and service providers who are committed to your goals will put you on the right path.
This article is intended for general informational purposes only and does not constitute legal advice or an opinion on any issue. It should not be regarded as comprehensive or a substitute for professional advice.