As We’ve spent the last few years looking behind us, wondering how we made so many mistakes and how we managed to overcome the challenges. Thankfully - at least in some respects - the challenges we face now relate to growth, expansion, investment and credit. .
The upswing has buoyed optimism, but it is tempered by caution. Those who survived the recession are finding themselves back in the black, but worried about getting their fingers burned, if not fried. Those who forged their businesses during the last decade may be doing just fine but are hamstrung by credit issues and cautious lenders. Fortune favours the brave, but it’s achieving sustainable fortune that everyone wants
Balancing risk and rewardEvery company wants to grow its business, yet few know how to sustain it for the long term or look beyond the next year, let alone the next decade. A business plan may have been complied with great care, insight and planning, but the pace of market change and shifting risks, most of which lie beyond the control of the owner, mean the traditional strategy doesn’t cut the mustard anymore. Many an office has a well-intentioned business plan resting on a shelf gathering dust. It’s time to rethink how we plan for sustainable growth. As your business grows it is imperative that your plans, your strategy and your objectives grow to reflect and exploit changing conditions. For example, your focus is likely to change from winning new customers to constructing profitable relationships and maximising growth with existing customers. Existing business relationships often have greater potential for profit and provide reliable cash flow. Newer relationships may increase turnover, but the profit margins may be lower as you may have had to reduce your normal rates to get a foot in the door. It is a delicate balancing act trying to calculate risk and reward. Reducing rates to capture new business, especially when costs are increasing, is not sustainable. .
I’m amazed how many companies chase turnover rather than profit. A successful strategy in any business should make specific reference to upper and lower rates. You should never sacrifice you profit for the sake of turnover
New ways of thinking
Owners often think that following the same business model on a bigger scale is the strategy to pursue. This rarely produces sustainable growth. The canny and the creative among you are exploring new ways of doing business, cautiously of course, but in the knowledge, that doing the same thing will only ever bring the same result. The more contemporary strategic models are built on flexibility, cooperation and collaboration. Rather than the cumbersome, traditional company model, the vanguard is lean, they cut their cloth to suit the opportunity right in front of them. They build networks of closely related, symbiotic skills sets which aggregate when needed, but disperse when not, free from responsibilities of the traditional employer.
Just as important as planning for flexibility is accessing the right skill at the right time. My father drilled in to me to always get the skilled people to do the job. Jack of all trades are never masters, and in his words “Sure they’d have the job done while you’re still figuring out where to start.”
Building A Skills Network
Part of planning for the skill access is first identifying your own strengths and weaknesses. Truly successful business owners cotton on to this early. They acknowledge their shortcomings, don’t take it personally and fill the gaps with the best people possible.Broadly speaking, traditional landscape work is either hard or soft. It is an unusual company that is top of their game in both categories. Even if they are, they can run into trouble in the long term and find it challenging to expand. My advice for Irish landscape companies is to do what you do best and let others do the rest. The real challenges with this model are building trust, managing expectation, communication, respecting disciplines and the nitty gritty of operations. I suppose it’s no different from any relationship
Finding contractors who could form such a relationship is the hard part, but I absolutely think this is something which should be considered by all. Perhaps there is a market for an online landscape dating service, where skills can be matched and relationships forged. Indeed, I have played matchmaker in recent years on a number of projects and all involved, including myself who was tasked with managing it, had a positive experience. Of course it won’t suit every project and contractor, but for smaller contractors it would be a sustainable way of expanding.
A small note to the above: while companies might be network based in the future, owners need to learn to delegate. I see it all the time, the owner run ragged thinking he’s saving money by getting involved with everything himself, instead of focusing on the things he knows about and delegating the other jobs to a specialist in that area.
Having a strategy built on flexibility and a responsive skills network is not enough on its own. Sustainable models need to continue learning to grow. They must have a knowledge investment component. Owners must be committed to continuous development, training and change. If you are not investing in training, you’re going backwards, at best you’re probably the biggest obstacle to the sustainable growth of your company.
We often hear about the importance of building the knowledge economy; the same thinking needs to be applied to your company. Yes, training investment may show little initial return and there is always the chance you’ll training someone who then leaves, but if you’re planning for the long term you have no choice.
Learn to listen
There are many in this industry who can be told nothing. They know all there is to know. The most successful know the fallacy of this. I wonder how many business strategies in our sector have planned for advice. Just because it feels right doesn't make it right. Take my advice, get the right advice.
As most in the sector will confirm, nowhere is advice more important than in finance. When everything is stripped down, it’s a business and the most important thing to have right is the bottom line. Finding a contractor who is expert in both hard and soft landscaping is rare, finding one who is also excellent with finance simply doesn’t exist. Financial control is always important; it’s the difference between a company’s survival and its death. That might sound negative, but the vast majority of busy companies are heavily exposed right now. One wrong step and any one of them can go under. A good finance person will help you make better decisions, they may well pull you back from the brink of immediate danger, but they will also help you to plan for next year and beyond. The smart companies still use gut instinct, but they turn to their finance person to make the final call. Some even have a good legal person on standby too.
I will finish as I began. The challenges facing us right now are not those which lie behind us, they are planning for sustainable growth in the future. Of course, I can say much more on this but the core message is simple: if you want sustainable growth, you need to be flexible, to seek out adaptive and evolving strategies, you need to build networks, invest in knowledge and seek out expert advice.