Rapid growth may seem ideal at first, but it is only a good thing if that growth can be sustained over time. To be sustainable, the rate of growth in a business should be at a level easily achieved without the need to increase financial leverage or debt financing.
Leverage is the amount of debt or money that a business has borrowed to finance the purchase of assets such as new plant and equipment or inventory stock. A company may also raise money from investors by leveraging equity, however keeping your debt to assets ratio to a manageable level is imperative to lasting growth. The debt to assets ratio shows how much of your company’s assets are financed with debt and if that amount were to reach 100%, you would no longer have a business to sustain.
Strength of Purpose
To reach sustainable success, a business must have a strong purpose, which requires smart leadership and suitable strategic partnerships to drive business growth and profitability. Managers and business owners must strategically lead their organisations through each growth phase to achieve continual business growth. They must also keep pace with the rate and changing needs of the business at every stage.
Beyond the fundamentals of a great product and strong market demand for that product, sustainable business growth needs a robust operational basis that will mitigate the risks to the business over the long term.
Improving your operational efficiencies will help to cut unnecessary expenses. A good starting point to achieving this is to encourage a workplace culture that operates effectively to streamline activities for optimal efficiency.
For example, in an organisation that relies heavily on inventory stock as a source of revenue, providing your employees with the tools and training necessary can produce efficiencies in inventory control, reduce waste and drive down costs Training for operational efficiency helps to ensure all activities within the organisation align with the business needs, helping to create and sustain business growth.
When establishing a scalable business, you need to understand the importance of building brand equity and implementing continuous, sound innovation. At the same time remembering that creating a unique product or brand, on its own is not enough.
It takes repeatable sales activities to create a scalable business, which requires engaging and building connections with your staff, customers and partners. Successful customer retention begins from the first interaction a customer has with your business and continues throughout the lifetime of the relationship.
Satisfied customers are generally repeat customers. It’s one thing to attract new customers and another to develop a loyal customer base that adds lifetime value to your business.
To ensure ongoing customer satisfaction it is imperative to have a robust inventory control system to guarantee customers have access to the right inventory stock, from the right place, at the right time.
Staffing for Growth
A business will struggle to grow without the right people and it is sometimes necessary for an organisation to reassess and recharge its talent pool. Having the right people in your business will undoubtedly make it easier to maintain momentum over time.
That certainly doesn’t mean getting rid of current employees and taking on all new staff. You do however, need to evaluate whether your current employees are identifying the right opportunities and servicing your clients appropriately to create and sustain business growth.
The effective use of technological solutions and innovations can have a major impact for business. Switching many of the operational activities, including inventory control systems, finance management tools and warehouse management systems, can have a huge impact.
Successful use of technological can certainly guide sustainable growth because it positively impacts strategy, operations, employee collaboration and customer experience.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.