Successful Strategic Planning for Scaling

For the person ready to conquer the world, companies that are developing strategic plans for scaling are the embodiment of this dream. You have a company that has matured, the organization has achieved stability, and your resources are such that you feel that you can consider expanding your operations. 

For a company that wants to scale, strategic planning is the heart of your company’s approach to this end. There are two key things that need to be accomplished at this stage:

Identify Your Goals: What are the things that your company would like to acquire? Also, what tools and equipment (include technology additions) will be required to make this a success? At this point, it is important that you are very thorough in your assessment. This is because you need to make sure you do not leave out anything or else run the risk of not being able to proceed due to not having a key component. Due diligence at this stage needs to be very rigorous.

Assess Your Financials: Plan for a very detailed study of your financials, both currently, as well as historically. Plan on getting at least five years worth of reports. The more you can get for your analysis, the better you will be. Once you have all of this information, study your income and expenses over this time, attempting to determine a projection based on these revenues. Take into account fluctuations due to recessions as well.

Obviously, getting this information will be tricky if you try to do it. Therefore, enlist people in your company for these projects. When it comes to developing goals, discuss this with your entire team, including your front line workers. This is because they might be aware of necessary purchases that other tiers of management might not be in tune to needing. Additionally, your financial team should be able to handle most of this. Of course, if you do not have the people in place, the time might have arrived to consider expanding your finance team for this purpose.

Once you have developed everything here, the next step is to create a capital campaign budget for all of these acquisitions. As a rule of thumb. Always plan on the high side when possible. While this will give you a much larger budget than you might wind up with in reality, at the end of the day, you will be fully prepared for any and all contingency issues, and unless something catastrophic happens, you will most likely be able to achieve your goals well within budget.

At this point, most likely what will need to happen is devising a plan to obtain funding for these capital projects. You might have enough working capital on hand to address quite a bit (possibly even all) of these plans without needing to obtain any additional capital. While it is important that this is done in such a way as to not jeopardize operations, if this can be achieved (even over a somewhat extended period of time) without hampering operations, it would be a phenomenal achievement, especially since you would be able to scale without assuming any added liabilities.

In most cases, this will likely not be the result. Optimally, having some available working capital will go a long way, since the financial institutions that you will need to talk with to give you the capital will be encouraged to see that you have some of your own funds that you can put toward the investment.

At this point, you might be noticing that this is a less than technical analysis. The reason for this is to help you as the owner (or CEO) be prepared for everything that will happen in this process. In order to effectively accomplish this, you really do need to have a dedicated finance team that can do this work. Even though I have done this before without such a team, it is not at all recommended, especially if you want to scale the business. While one person can do the work, it takes a team to be able to do it effectively, ensuring that the company not only grows but also is in a position to be able to successfully cement its gains for the long term.

As an owner or a CEO, you will very much be a part of the process of developing a strategic plan. However, at the end of the day, you will need people to develop portions of the plan, segments that only they can do with their expertise. You simply need to know all of the components of the plan and make sure that everything gets figured out accordingly.