Do you have a strategic growth plan, and if so, how are you able to implement, measure and execute that plan while still managing the day-to-day operations your enterprise requires?
OPEN Forum recently posed that question to three CEOs who participated in an intensive, 13-week course titled “Emerging Leaders," operated by Boston-based Interise, to help seasoned business owners with highly effective strategies for growing their enterprises. We spoke with Billy Tose of Oakmont Contracting, Kishan Amarasekera, P.E. of ATI, Inc., and Tamara Thomas of Hidden Levels, LLC about their strategic growth plans and tactics for tracking success.
What are the best tactics for monitoring your strategic growth plan, including how to check on it monthly, quarterly, annually, long term?
Kishan Amarasekera: There are a couple different aspects a business owner needs to monitor—namely, the current health of the company and the projected growth/performance going forward. For the former, I use the standard financial indicators such as profitability and similar financial ratios. The Emerging Leaders class was extremely valuable in this respect, because I learned about a few different financial performance markers that give a quick look at profitability, solvency, cash flow and collections efficiency. I track these factors on a weekly to monthly basis. Some things like billing are tracked weekly. For growth tracking, I look at cash flow projections on a monthly basis as well as booked work on a quarterly, semi-annually and yearly basis. We also look at our business development targets monthly and try to project likely win-ratios and revenue.
Tamara Thomas: My best tactics are a part of my weekly and monthly activities. Every week on my calendar, I have planned an additional item to start and complete. We then monitor these weekly activities by the end of each month. The monitoring allows us to see some success with completing them and following up to see what we can do better.
Billy Tose: With the strategic growth plan, you have a long-term place you're trying to get to, but you should set short-term and intermediate goals you have to reach along the way. For example, if you're trying to grow to a point where revenue is $6 million per year, which would mean roughly generating on average $500K a month, every month, you need to check to see if you hit that number. If so, great, but if you didn’t, you have to evaluate why you didn’t and make some adjustments if needed. If you look at it quarterly as well, you can see if you are doing $1.5 million per quarter. You could have had three months where you brought in $500K, $300K and $800K to get there. If you overreacted in the second month when you only did $300K, you may have sabotaged the $800K month and not realized it. Or if you had three flat months in the quarter, then you have a large enough sample size to go in and make some changes. The same thing would apply for your annual review.
What were some of your goals for this year?
Amarasekera: My primary goal was that I wanted to increase revenue by 50 percent. I also had specific targets for obtaining specific contracts or task orders.
Thomas: Some of my goals are: 1) to reach out to my bank to obtain a loan for the business; 2) to hire one professional and one to two youths from the Youth Works program; 3) to focus on more government contracts; and 4) to contact another professional in my industry who is involved in the SBA mentor-protege program.
Tose: My goals were: 1) get to $4 million in new contracts; 2) obtain at least one contract for Department of Defense, GSA and state government, and 3) develop at least one strategic partnership with a larger firm that will help me grow and develop and provide access to markets, and information I may not otherwise be able to get to on my own.
How have you made mid-year adjustments with those goals in mind?
Amarasekera: We were lucky in that we were able to book enough revenue in the first half of the year to meet the projected growth goal. So the adjustments I had to make were more personnel related—trying to find the right people to do the work that we managed to win. I also shifted the target to next year, shifting the business development focus/budget toward longer-term client/contract targets identified in our plan.
Thomas: In May, I made an appointment with my accountant to get an assessment of the finances for the business for the first quarter and the previous year. With success, we have submitted all paperwork needed for a short-term or long-term loan for the business through our bank. We have completed an application with the Youth Works program for Baltimore City and are looking forward to hiring an individual to work with our firm throughout the year, not just for the summer.
Tose: The main adjustment was that I increased the contract goal from $2 million to $4 million, and I added the strategic partnership. We have been presented some opportunities in the last few weeks that, if they pan out, will accelerate some things.
Do you have outside resources you use to create your strategic plan? Or is it done internally or exclusively by you?
Amarasekera: It was done internally by me and Jon Kruft, our VP/director of business development—a full-time executive level position we created and staffed earlier this year. However, I used many of the tips learned and insight gained during the Emerging Leaders class to clarify some aspects of this plan, and to improve it to make it a smarter and more well-defined strategic growth plan with goals that are more measurable.
Tose: I created my strategic plan, but I took input from my business development partner and other people whom I trust and respect as well.
Thomas: Most of our strategic plan is done exclusively in-house; however, I have reached out to other business owners who are very successful and asked for their opinions and/or assistance. I also read and researched best business practices from others. Lastly, the book we are reading, Duct Tape Marketing, has been a guide to inspire me to do more marketing and visualizing our ideal customers as more than just another contract.
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