Was this decision smart?13th April 2018
You own a fast growing direct mail company that serves 50 clients a month.
For many of these clients, not only do you write the marketing text for the letters they send, but you print them out, place them in envelopes and post them to the correct recipients.
You currently have two members of staff doing this part of the job and it’s working well. They are cheap. They work efficiently. Everything happens on time.
You’re ready for the next step in growth – you want to make sure that you’re ready to handle 100 clients a month - and consider an aggressive growth strategy.
What would you invest in to ensure operational processes remained efficient and all your clients were happy?
One possibility is to invest in a third member of staff to join the team and continue the manual work. Everything is working well. If it ain’t broke, why fix it?
Financially, this decision makes sense. You can afford to hire someone new and it is an investment you are comfortable with.
Or…. You can take the opportunity to look at the whole way you handle sending out these letters, and see whether you can do things differently.
For example, you could buy machinery to automate some of the processes involved. Or you could develop a relationship with a mailing house, which will do it all for you, and make your two employees redundant.
This would allow you to scale much faster, and in the future, handle your 100-clients-per-month much more efficiently. It’s more of a stretch financially……
But that’s certainly what we would have advised.
Over the past couple of weeks I’ve been talking about the need to continue investing in your company even when it feels risky.
It’s important, though, that you invest in the right things….
…The things that answer long-term needs and set you up for fast growth – not things that answer your needs right now but ultimately will slow you down.
It’s too easy to continue investing in ‘more of the same’. But if you want to set yourself up as a serious, growth-focused company, you need to continually re-evaluate what would make your operations easier when you are operating at a larger scale.
You need to think about what you’re going to need in two or five years’ time – and then get those measures in place right now. Even if it feels a bit risky.
The company I described to you above – which is real, even though I changed some identifying details -- did just that. When they developed their partnership with the mailing house, they were nowhere near the point where they would have to handle 100 clients a month.
But they realised that if they were serious about getting there, they needed to change tack right now – instead of waiting until they were helping 80 or 90 clients a month, and struggling. They had to start behaving like the company they wanted to grow into.
It’s a great example of what makes a smart, long-term investment – and which is worth stretching yourself financially for.
Is growth planning something you’re keen to do for your business?
Then let’s have a conversation.
We can look at your plan for growth, and help you identify the very best investments that will help get you there. If you want to grow from £1 million or £2 million to £10 million – or more – we will make sure that you are making the most sensible financial decisions to support that goal.
To own a £10m company tomorrow… operate like one today.
PS. Whenever you’re ready… Here are four ways I can help you sort out financial issues in your business:
1. Give your company a financial health check.
Make sure there are no nasty surprises lurking in your accounts and that your cash is being handled safely and professionally. Click here to find out more.
2. Grab a copy of my book, Business by Numbers.
Discover how to put the right financial foundations in place for your business, so you can grow faster. It’s like having me at your beck-and-call, 24/7, for less than £10. Click here.
3. Work directly with me and my team.
If you’d like to work directly with us to make sure you take the very best financial decisions for your business and grow faster, just reply to this message and put “Working directly” in the subject line. Tell me a little bit about your business and what you want to achieve financially, and I’ll get back to you with details.
4. Join our ‘Just One Day’ programme.
We’ll spend a day with you and your directors, putting together a detailed, workable plan to drive your business forwards. Perhaps for the first time, you’ll achieve complete clarity on where you need to take your business – and exactly how to get there. ‘reply’ for more details.