Ambitious small and mid-sized businesses in the support services space need to have a long-term strategic plan in place in order to build a solid foundation for growth.
What does that framework look like? While every business will need to plan according to its specific goals and needs, these are our top ten tips for facilities management businesses that are looking to drive significant growth:
Build a deep talent pool
As you grow, you’ll need more and more good people to help drive your business forward. Ideally most of them should be home grown, so make sure you’re investing in training and development. But mix things up now and again with fresh perspectives and specific skills from external recruits.
Work hard on culture
A strong positive culture will energise your people and act like a magnet for new customers and new talent. Be clear about your culture and make sure you are getting it right.
Balance freedom and control
You need to give good people the freedom to get on and run their part of the business. Delegate P&L responsibility as far down the business as you can; but make sure that there are clear boundaries – strategies, policies, rules and budgets that people must work within.
Listen to the numbers
Live in a data rich environment. Get information early and develop a suite of key analytics. Always listen to what the numbers are telling you – and always act quickly.
Put markets and customers at the heart of your business
Organise your business around markets and customers so that you can really get to know what makes them tick. And build strong personal bonds with your customers at every level of your business, including the senior team. Make sure you and the rest of your top team are spending a good chunk of their time with customers.
Develop a clear strategy – but keep things flexible
Understand the dynamics in your markets and keep a close eye on your competitors. Compete in growth markets where you can build a winning position and become an important part of your customers’ lives. Make sure you’ve got a clear strategic business plan and detailed budgets. But don’t be rigid – if the world changes tomorrow, make sure you have the flexibility to respond.
Build a brand
It may be subliminal, but a strong positive brand with a clear set of values will yield significant benefits. Customers and prospects will feel more confident about dealing with you. The best people will want to come and work for you. And, when it comes to exit time, it’ll help maximise the multiple.
Make sure you’ve got a convincing growth story
If you’re looking to realise the value in your business, you’ll need a really convincing growth story. You’ll need to be able to show a track record of consistent growth – at the top and bottom lines. You’ll need to be able to show that you can win major contracts – and maybe also that you can find and complete sensible acquisitions. Looking forward, you’ll need to be able to demonstrate a strong order book, with visible, longer-term revenues, that your business is scalable – and that you’re well-positioned in markets that will keep on delivering growth opportunities.
Keep a clean business
Make sure that all key business risks are identified, managed and mitigated and that you don’t have any time-bomb liabilities. Don’t let poor record keeping and documentation trip you up – contract documentation, personnel records, health and safety records, property leases and titles and insurance documentation all needs to be easily accessible and up to date.
Cash, cash, cash
It’s advice that’s probably as old as business itself, ‘revenue is vanity, profit is sanity but cash is king’. Just make sure you’re converting your profit to cash, that your cash conversion ratios are where they need to be and that you understand intimately the working capital needs of your business.
Billy Allan, founding partner of Aliter Capital.