One of the most familiar fables is that of the tortoise and the hare. In that story, the tortoise eventually outpaced his foe by taking his route slowly and steadily. Does that mean that an agency owner who has his or her eyes set on growth should take the slow route? As with nearly any debate about agency management, there’s no simple answer.
The approach that’s best for your agency depends on a lot of factors, including the way you manage your day-to-day business, your capacity to handle growth, your goals and the overall nature of the markets you serve. That said, there are some advantages — and drawbacks — with either approach.
One of the biggest dangers of growing slowly is that the decision to do so is often built upon the assumption that both you and your business will be around for a long time. We all hope we’re blessed with many years, but that isn’t always the case.
Even if we remain healthy, the business climate may not. It typically takes many years before agency own¬ers see substantial profits, and if you’re counting on those profits to put your kids through college or pay off your home, the timing must be right.
Putting your agency on the fast track may be exhilarating, but rapid growth creates an entirely different set of challenges. Growth generally requires some degree of investment.
That’s not a problem, as long as the increased revenue keeps pace and your cash flow remains positive. Should your expenses start to outpace your reserves, a slow month or two could be enough to significantly strain your cash flows.
If your goal is to grow quickly, make sure you have a good grasp of how to monitor your cash flow. If you’re not completely sure, get some guidance from your CPA.
Grow faster by slowing down
If you’re eager to grow your business, the last thing you probably want to do is slow down the pace. Dialing back the speed can be very sensible. Take some time to perform thoughtful planning. In fact, assessing your strengths and weak¬nesses and writing a formal business plan can be an excellent way to think through all of the aspects.
Your plan should spell out clear goals for growth, along with a timetable and practical milestones that will allow you to gauge your performance. It should provide tasks and needs for each of your goals, and prioritize them so that you can make the best use of your resources.
No matter what your objectives may be, your plan should address certain impor¬tant questions. One of the most important questions is whether you’re properly staffed to achieve your targets, and whether you and your current employees have the right skills. If additional training or hiring is needed, the plan should spell out exactly how and when that will happen.
Another key issue is your current space. If your business is going to grow, do you have adequate space for your operations? Is your current facility appropriate for the type of business you plan to target?
Equally important is how you’re going to fund growth. Do you already have sufficient capital to make the moves you’re planning? Will you need to borrow money, and will your financials be attractive enough to convince the right funders to lend?
No matter what you plan to do, or how you plan to do it — and no mat¬ter when you choose to grow rapidly or through a more measured pace, there is one thing you should do as quickly as possible: learn as much as you can. The more you know about your business, your market, and your industry, the more effectively you’ll be able to plan, and the more likely you’ll be to achieve your goals.