Reznick Group’s Growth Markets Practice in Tyson’s Corner, Va., has built its reputation working with companies through challenging times, helping to analyze business opportunities and maximize tax savings. Over the years, they’ve seen patterns in what makes some businesses thrive while others struggle and fail to take advantage of opportunities that are presented even when the market is down.
“Many of us at Reznick are former entrepreneurs ourselves or have a lot of experience working with entrepreneurs, so we can evaluate and assist clients as an insider, as opposed to an outside consultant,” says Alex Castelli, head of Reznick Group’s Growth Markets Practice. “We see so many make the same mistakes and it’s heartbreaking, so we put these tips together to let businesses benefit from what others have learned the hard way.”
Here are Reznick’s top ten tips for growth-oriented companies and entrepreneurs seeking to not just weather the current storm, but flourish in today’s challenging business environment.
1. Check Your Ego.
You know your business, but that doesn’t make you an expert at running it. Smart people know what they don’t know and surround themselves with experts and advisors and then listen to them. Don’t be afraid to ask for advice and then, take it.
2. Hire Someone to Watch Your Money.
Lack of a strong accounting and finance team or CFO can be the only thing keeping you from reaching your financial goals. Find well qualified people who share your vision and then step back, take their advice and let them lead you there.
3. Know When to Persevere.
It’s critical that you stick to your mission. Lots of would-be success stories end before they’ve had a chance to take hold because they give up when the challenges seem insurmountable. Don’t let the challenges along the way stop you. Arm yourself with market knowledge and an expert team and push through.
4. Know When to Cut Your Losses.
Many entrepreneurs make the mistake of not recognizing when it’s time to either change direction or call it day, and having the courage to do so is not only very savvy, but it can be quite liberating and can lead you down a better path for your business, with a clearer picture of what will or won’t work.
5. Grow To Survive.
Many assume it’s best to reduce offerings to make it through tough times. While this strategy seems intuitive, sometimes, the answer is to do just the opposite – to grow. Before cutting back and shrinking your business, consider first whether additional funding can push you through to the other side.
6. Keep Cash On Hand.
One of the biggest mistakes growth companies make is to run out of cash. While the sun is still shining on your business or before your financial picture has a chance to turn sour, meet with lenders and/or landlords proactively to see if there are opportunities to restructure debt, payment terms, etc. Having cash on hand is critical for staying afloat and continuing to grow.
7. Get More When You Have More.
Don’t wait until cash balances get low to secure more funding. The best time to get more is when you have more. Securing a line of credit while you still have plenty of money in the bank gives you the ability to negotiate a larger line of credit and better terms. It also gives you the ability to make payroll during slow times and to have access to cash as needed. In addition, it gives you an opportunity to develop a business relationship with a bank. Waiting until you really need money takes away your negotiating power and leaves you at the mercy of the bank.
8. Remember Your First Fans.
Many entrepreneurs seem to forget the source of their first funding. Every company should have a solid investor relations strategy to keep investors engaged and aware of where their funds are going and communication is the key. In addition to funding, a good investor group can provide mentoring and other resources to entrepreneurs. Many companies don’t realize that they may have to call on their investors along the way for additional support. So keep the communications going, and keep them involved.
9. Know When to Sell.
Many companies miss or worse – they pass up – incredible opportunities to sell their company because they are not prepared to adequately evaluate the opportunity. You have to know where you are in the marketplace at all times, what your potential is, and what it will take to reach your potential, in order to know whether to answer the door when opportunity comes knocking, or to ignore it.
10. Share Your Knowledge.
In today’s business world, success and influence are in the hands of those who share their ideas, not those who hold them close to the vest. Yes, you may lose a little competitive edge by sharing your secrets, but what you lose in edge, you gain in influence, and possibly, success. Partners, clients and competitors will appreciate the dialogue and insight and may offer you theirs. So when you’ve found a great tool or solution, or you’ve gained insight, tweet it, blog about it, author an article, post it to Facebook and watch the love return in spades.