Virtually every business owner or CEO I know wants to grow their business. It’s pretty rare that any of them will ever say, “I’m content to let my business shrink until I have to declare bankruptcy!” Not a chance! Growth is the common decree and desire of most business leaders.
However, if you or I were to ask them, “So, what’s your growth budget for this coming year?” most of them would give us the deer in the headlights look. In fact, you might be giving yourself that look right now.
It’s the first week of a new year. My guess is that you have a deep desire to grow your business or organization–and probably significantly. So, what’s your plan? And then, more importantly, how are you going to fund it?
If you’re like most of the owners and CEOs I know, you probably don’t have a growth budget–especially after the past two years where there’s been an over-reaction to the economy–and a massive focus on cost-cutting. And where do most CFOs and others typically look to cut costs.
2. R&D (new product and/or service development)
5. Outside consultants
6. New technologies
Now take a look back at that list. What do you notice about all of those items? Exactly! They’re all designed to help someone like you grow their business (or organization).
At the same time, those are the six most critical elements of a growth budget. So, as you take a look at this coming year, if you want to create a growth budget, I’d start by taking out a piece of paper (or a computer) and list out those six categories.
1. Staffing. What new staff do you need to hire this year (whom you can leverage for greater results)? At what cost? And when?
2. R&D. What the next new thing (product and/.or service) you need to create in order to rapidly grow your business? What do you need to innovate? Or what do you need to acquire? Growth companies don’t depend on old products and services. So, how much do you need to allocate for serious R&D this year?
3. Marketing. What new markets are you going to enter to get more new customers? What new strategies are you going to deploy? What new media are you going to use? How much do you need to allocate to drive several strong campaigns that can rapidly grow your business?
4. Training. It’s hard to grow a business without better trained and equipped staff. For you to get better as a company, your people need to be better. So, how much money do you need to add to your training budget to have better equipped staff (who can deliver better results in less time with fewer problems)?
5. Outside consultants. Now, you may think this is self-serving, but good consultants should typically self-fund themselves (i.e. deliver results that more than cover their cost). However, more importantly, they should bring IP to your business that lets you succeed at a faster rate. Remember, if a consultant “costs” $30K but helps you generate an extra $100K (that would be growth). At that point, he or she isn’t a cost, they’re an investment. The real cost is in not using them (i.e. $70K of lost revenue).
6. New Technologies. Finally, what new technologies could, if acquired, propel your business forward faster this year?
At the end of the day, every business grows, not by focusing on cutting, but by focusing on growing. As the old adage says, “If you want to make money, you need to invest money.”. So, if you haven’t done so already, why don’t you take some time this week and create a growth budget! You’ll be glad you did!
To your accelerated success!