Growing your business can be challenging, confusing, and risky—but it’s also incredibly rewarding. As you consider expansion, there are a few key fundamentals that can be applied to any business type.
In this June 2021 recorded webinar, Shirin Behzadi, seasoned business advisor and former CEO, explains the most important building blocks when taking the first steps to growing your business. Shirin will help you gain a better understanding of the core foundation needed when taking your business to the next level.
In this video, you’ll learn how to:
- Define your growth path and create a strategic roadmap
- Uncover your business potential and identify your growth levers
- Prioritize what’s most important
- Analyze and track growth metrics along the way
Shirin Behzadi is an entrepreneur, board member, business advisor, and former CEO—one of the most respected and sought-after female entrepreneurs in the industry. A visionary leader and brand builder, Shirin has overcome life’s challenges with determination, hard work, and her now famous motto: doing well by doing good. Shirin’s passion is guiding and mentoring individuals and business owners, advising and speaking with the leaders of tomorrow.
• Defining your growth path
• Know your numbers
• Understanding how you earn sales
• Identify your growth levers
• Create roadmap for growth
• Evaluate your plan’s shortcomings
• Communicate your plan
• Execute on your roadmap
I have been fortunate enough in my life to be involved with a lot of businesses that I’ve helped grow, whether it was as my position as the CFO and the CEO of the company where I stayed for 20 years and grew it to multiple brands and hundreds of millions of dollars in sale, or my previous experiences as a CFO of a mortgage bank. Or today, I’m on multiple boards, both for-profit and non-for-profit, and I’m again with a startup. So having been involved with a lot of growth and a lot of different ways of growing from small businesses to large, I’ve been fortunate enough to really understand what growth is like. What is that path like?
As a result, I’ve been able to distill it down to some fundamentals. So regardless of the size, whether you’re a small operator, a large operator, or somewhere in between, there are some fundamental basic building blocks that work together to help you grow your business. Obviously, there’s a lot of conversation around growth, right? There are books written, there are webinars, there are podcasts. This is a really broad topic. So in 45 minutes we’re not going to be able to answer every question or get into all of the details. The idea today is to give you some building blocks that you can then apply to your own business. Take away nuggets from the conversation today, dig deeper with them to help yourself grow your business the way you see fit.
In the way of background, like I said, I grew up as a CPA, I was with Ernst & Young. I was subsequently a chief financial officer of a mortgage bank. I then became the chief financial officer of a company, where again, we were able to recruit power of equity into the life of the company. Then I was able to, as a CEO, grow the company to double its size. We were in franchising, so we were very involved with small to medium-sized businesses. And of course, we had a very successful exit in 2019. Since then I’ve been on multiple boards. And like I said, I started a new startup as the founding investor and chairperson last year, and we’ve been growing by leaps and bounds there. My motto in life is doing well by doing good. So my goal today is to give you some hints, advice, tools, hopefully actionable steps to help you grow your business the way you see fit.
Defining your growth path
So, what are we going to cover today? We’re going to talk about how to define your growth path. We’re going to work on, with a few examples, how to actually create a roadmap and understanding and solving for your business’s potential. Then, how do you track all of that growth? How do you stay on track? Like I said, the idea is to say there are building blocks based on which you can grow your business. The very first fundamental block is for you to define what growth means to you. We’re talking about how to help your business grow, but what does that mean? Because growth means different things to different people.
Do you want more revenues? Well, everybody says everybody wants more revenues. But that’s not necessarily the case, because somebody may say, “I’m not as keen on revenues. It’s not necessarily my number one goal. My goal is to have more profits.” So sometimes actually to generate more revenues, you have to spend more money to generate more revenues, which dips into your profits. So you have to say, “what is my ultimate goal? Do I want more profit?” That would be the focus of your growth plan. Maybe what you’re looking for is better cash flow. Maybe you feel like your cash flow is a little stuck, and you need more of that. So you have to be mindful of, does that mean that I’m not going to invest in certain things, even though those things may generate better revenue and profit, because I’m more concerned about my cash flow? Or, you just haven’t found your path to profitability. So you have to really focus on what’s my break even? How do I get to profitability faster? How do I reduce my losses?
Maybe you’re at a position where things have not yet turned around, which happens in businesses. So how do I reduce losses? Or maybe you’re in a fortunate position of saying things are going so extremely well, I want to grow by leaps and bounds from here. So ultimately, you have to define what you want in the way of growth. What is it that you want to focus on? Why that matters is that it defines a goal for you. It is only by defining that goal that you can then create a roadmap. Think about it: You don’t get out of your house and just randomly start driving and say, I got to my destination. Maybe just luckily you do. You first decide on your destination, and then you take the road to it. The whole point of this conversation is take a little bit of time. Really define what growth means to you. Do you really even want to grow? And then once you do, we’re onto the next lever.
Know your numbers
Once you define your growth goals, you have to understand your fundamentals. What makes you company money today? Now I’ve been involved with even non-for-profits, and I’ve got to say, even non-for-profits would have to understand their numbers because they’re generating cash for a reason. And this is by far the most challenging pitfall that I’ve seen everybody fall into. Whether you’re a small operator, medium operator, or a large operator, you would be surprised how many business owners I’ve talked to that don’t really understand their own income statement. I want to show you a very broad sample of income statement—we are not going to spend time on income statement.
There’s definitely a lot to be done. There could be webinars after webinars of how to understand your income statement. That’s not the whole point here. My point is to highlight that you have to be a student of how you make money and what generates sales for you. In this example, I had services and product sales. For you it could be something different. But it’s important to understand: What are your cost structure? How are you making money? The idea isn’t to make you an accountant. The idea is for you to understand the fundamental basics about your own business. Because until you understand that, you can’t grow, or you can’t grow successfully. So take the time and really educate yourself. What makes you money today?
As you see in this example—of course you can look at a month’s snapshot, compared to year to date, you can look at every month, all kinds of ways—and some of you may be very savvy at this, in which case I say congratulations. Take a second look and make sure you’re very, very in tune with how you make money.
Understanding how you earn sales
Once you’ve defined your growth goal, and you really have to dig in to understand your fundamentals of how you make money, you have to understand how to earn sales. I want to pause here and point something out. Notice that we’re doing some good groundwork here. You may be ready—roll up your sleeves, I want to grow right now. What I’m suggesting is, make sure you’ve got your foundation done right. One of the riskiest times for a business is when you’re growing. It’s kind of like a plane. When it’s taking off, you have a lot of risk. When it’s at its elevation, they can cruise for some time. It’s the same thing here. It is to your advantage to really set the foundation on strong from which you can build very quickly.
The third building block is understanding how you earn sales. Here’s the thing: No matter what business you’re in, you’re selling something. You’re selling service, you’re serving consulting hours, you’re selling products. Whatever it is, you’re selling. So it’s very important for you to understand who your customer is, how they buy, and how you generate interest from your potential customers. How do you get them to buy? This is a very, very simplified version of a cycle that you need to really understand very, very well.
First is exposure. Exposure means casting a net of your potential customers, be it via digital marketing, mailers, email, radio, whatever it is. Exposure gives you a wide universe of folks that you can potentially bring in as customers. And to really simplify it, there is always a conversion matrix in there that says, of all of these people whose interest you got, so many of them convert to becoming our customer. So in my example, 10,000 eyeballs with a conversion rate of 5% will provide me with 500 customers. This is obviously super simplified. The idea is, you’ve got to understand this process really well in many ways that you do your own marketing, you generate your own leads. It could even be people walking into a store if you have a storefront. But you really, really have to understand this. In fact, I want to say that in the more complex world, towards the last stages of the growth of our company when we were really large, this was still front and center as something we really needed to understand to pivot and adjust. So it is imperative that you get that.
Retaining their interest
There’s one thing that a lot of businesses forget, and that’s retention. So it’s one thing to spend dollars and effort to generate interest and convert them to customers and therefore sales and close them to sales. But it’s another thing to remember to retain their interest. How do you cultivate that relationship on a go-forward basis? This is the cycle that you really, really need to understand for your own business.
Identify your growth levers
So here we are, you’ve identified your growth goal. You really understood the fundamentals of how you make money. You really understood the fundamentals of how you generate sales. Now it’s time to identify your own growth levers.
Let me explain what I mean. Growth levers means, of all of the ways you make money, the things that generate you sales and the cost of those products and all of the expenses that go into it and your whole lead-to-sales cycle—of all of those things, what can you really impact? There are things are just can’t. You look at them and you go, “there’s no way I can make any changes with this particular line item.” As an example, maybe you’ve gotten into a long-term lease, and you’ve looked into it and you can’t get out of that lease. So there’s no point in constantly going back and saying, “what do I do with this?” There’s no point. So be realistic about what you can change, how much you can change, and over what period of time.
So maybe some of the questions you can ask yourself are: Can I generate more leads? Is this possible? Can I refine the way I’m generating leads based on now having looked at how my leads work? Can I close those leads better? If it’s a project that you’re working on, what can I do to close them better? How do I service my client customers better? Or if it’s somebody walking into your store, how can I train my staff to make sure that these customers do buy and we close them better? There are many times where we spend all these dollars and we have unclosed leads. Can we go back and cultivate them? Can I sell more products? So maybe somebody comes in, or maybe you have somebody buying products from you and you look at the mix and you realize you’re always selling the basic. Is there a way to upsell? Is there a way to create bundles that are really useful for your customers and clients? Is there a way to train your folks, your employees, your staff, to do the same?
Can you sell at better margins? I mean, that’s one thing we sometimes forget. We look at the products that we’re selling, but it is time when you look at now more closely how you’re making money. Do ask yourself the question, “Can I buy better with any of these products?” Maybe I can take advantage of some discounts. Maybe there is a way to change or shift some of my suppliers where they’re more regional to me to reduce shipping costs, whatever they may be. Maybe I bundle my purchases so I get better discounts. At the end of the day, is there a way to sell at better margins? And of course, just turn down costs all together across the board.
Now, these are just some of the examples. The idea is to sit back, and now that you’re really educated, you may have been educated all along about what makes you money, ask yourself: Which of these things can I change over time, and to be realistic, can I do them?
Make a list of your growth levers
So once you do, you make a list of these growth levers. Now, this list is going to help you create a playbook. This is going to be your roadmap, these are the things I’m going to do. What I’m going to focus on today is just an example, right? So please bear in mind, this is just an example. The idea is for you to see how it could work for a business, and then you decide whether or not and how it would apply to yours.
Example: Close More Sales
And by the way, when we were looking at growth goals, this particular example is more focused on profit, because I think that would probably be most everybody’s ultimate goal, to just make more profit. Having said that, maybe in my case, in this example, I’m saying I can close more sales by 10% every month. And the reason why I know I can, and so we have to be very realistic, is I’ve looked at my sales cycle and I noticed that I need to train my sales people better, or I can give them more tools to sell better, or I realized that there are so many leads that come in where they’re not closed—I’m going to cultivate those unclosed customers and see what went wrong and fix those, whatever those may be. In my example I thought, okay, I can do 10% more—10% every month, month after month.
The other growth lever—and generally you’re going to have a few growth levers, hopefully—the other growth lever in my example is that I think I can upsell by 10% every month, month after month. This one maybe is because I think I can train my folks that when they see a customer, don’t be so reactive. When the customer is asking for something, ask a few more questions so that the product you give them may be a little bit higher price, but it’s a better fit for them. Maybe I’m finding that everybody’s selling basics and maybe mid-level oftentimes or high level oftentimes is a better solution. So having unlocked that mystery, I think I can do 10% better every month. Or maybe we create a new bundle, and we know that we can sell that bundle better month over month, whichever way this is. In my example, I think I can upsell by 10% more every month.
Example: Buy better
Like we talked, there’s also the opportunity to buy better. I look at my product mix and go, “ah, I think I can buy better by going to a different supplier.” But that’s not something I can do immediately—maybe I can do that in three months. Again, have that planned out as my growth lever. When it comes to costs, I’m only focusing on a couple because we can sit here and talk about costs all day long.
Example: Reduce costs
But let’s say I say I can do better with digital marketing, reducing my cost by 5% because now that I’ve looked at my digital marketing, there’s some waste there.
Example: Payroll efficiency
And maybe I look again at my overhead and I go, “I do have a lot of overtime. Potentially by training my staff better or bringing in a call center I can reduce that.”
Create roadmap for growth
As you see, in this example I found five levers and I timeline them, I’m being realistic about them. These will become my roadmap. So now you’ve created your growth lever, the list of them, and now you’re going to actually create a roadmap. This roadmap, one idea is to take your income statement and plan it out month after month. You don’t need to do it this way, this is just my example. You can put it on a piece of paper, whatever works. Why it works with an income statement for me is that it can give you a month after month timeline and plan, and you can see it in black and white. But regardless, however you do it, you’ve got to document your roadmap.
Documenting your roadmap
We just talked about the levers. Remember I said I’m going to increase my sales month after month after month. The way I would do it is to say, okay, for the month of June, in the way of services, this is my service that I’m selling. I sold $19,000. I think if I raise it by 10% every month, so in July I’ll sell $21,000. In August, I’ll sell $23,000 and on and on. By the time December comes around, I will have sold $34,000. That’s my roadmap. So I know, okay, in July I’m expecting $21,000. In August, I’m expecting $23,000. And I put all of the ingredients in place—training and making sure my folks know how to close better to get to these numbers.
Remember, my second growth lever that we talked about in the way of example was that I thought I can upsell more. And I thought I can up some more of my products by 10% a month. Again, here for the month of June I sold $11,200. If I go up by 10%, in July I’ll sell $12,320. I take a look at it, I go, “that’s doable because I created all these bundles and there are ways I can do it.” And it goes up and up and up until December, where I have $19,000. Again, in my roadmap I only did for the rest of the year. You can do it for 12 months, however is best for you—or you can do it not in the format of an income statement, just write on a piece of paper, document it so you can share it, which we can get to in a minute.
In the way of buying better, like I said, I don’t think I can buy better for another three months. So in my example, I said, starting October I’m going to buy better so my cost is lower as a percent of my sales.
This is the expense side of the income statement. And, my gosh, you can just sit here and play around with expenses all day long. I suggest you actually do to see if there are places you can trim costs. I bet you there are places you can do better. But in my example, I said, maybe there’s just one place I can do better, and that’s digital marketing by 5%. So I dropped it in, so it goes down from $3,000 in June, to $2,850 for July and later. This is just an example, but to show you that there are places where you can save some money in your general cost of running your business.
Getting the right team in place
One place that I thought would be worth pausing and talking about for a minute is employees. In this case, I just assumed that we had a lot of overtime. And in June we had $3,500 that we spent in this particular position. There’s no way we can fix that overtime—bring in a call center, train people better, so on and so forth. I think I can reduce my overtime by September. So I dropped it in here as an example, but it’s also our opportunity to talk about the employees. Most businesses, small or large, have one of their largest line items of cost is employees—salaries, commissions, whatever it may be. And oftentimes we fall into this habit when people are here and just here, we don’t necessarily reengage. But it is our job, whether you’re running a business, you’re an executive, to make sure you have the right team and the right mix. Do I have enough salespeople, more backroom, or do I need more backroom people, fewer sales people? Those are the things you need to think through.
You also have to think through: Is every person in the right seat? Are they delivering on the results that you want? It’s best to take the time to do that because it’s also to the advantage of those employees. If they need training, if they need tools, if they need ways to get better, let’s get those done for them, rather than just assume and go along, which is not positive for them. It’s not positive for the team, it’s not positive for you and your business. So it is very important as you really look at growth and where you want the company to go, to take the time to also make sure you have the right team members in the right seats, with the right kind of training.
How the levers work together
I just want to show you, the whole idea of growing a business is about making incremental steps that add up to each other. There’s no silver bullet. There’s no one thing. Maybe in unique situations that would be the case, but generally speaking, it’s not just one thing that works. It’s a combination of things that you do right, and hopefully you do more right things than not to get your company to grow. So I just want to show you the levers that we talked about, the five levers. This is how they could potentially work together. We talked about me selling 10% more every month. So this line item, if you recall, we grew it by 10% month after month after month. And you’ll see it goes from $19,000 to $34,000 in December. We also talk about upsell. We talked about how we can grow that from $11,000 to $12,000, and so on.
Then we talked about how we can reduce our cost of goods, meaning buy better. And we said, we’re going to implement that in October. I dropped that in. Just by doing those three growth levers, you’ll see that my gross profit grew from $24,224 in June, gradually, methodically, month after month after month until I got to $43,000, almost $44,000 in December. Again, this is an example. As far as operating expenses go, I just collapsed it all so we’re not looking at the really long income statement. I reduced my cost of digital marketing, I reduced my overhead in a few months, and so I reduced my operating expenses slightly over time.
What that means is that then all of those things work together, and in your case you’re probably going to find a lot more than we have the time to discuss here. All of those work together to give you the bottom line growth that you’re looking for. In my example, I started my June at $2,100 of net income. And by December it’s going to be 10 times that. So that’s the point of incremental growth so that things can work together to give you what you’re looking for.
Evaluate your plan’s shortcomings
Now, we talked about growth levers. We talked about the roadmap. We talked about having the right team in place. Every business, every person, every plan has shortcomings. The idea is, if you want to get to what you’re looking for, you also have to fix what those shortcomings may be. Oftentimes, when we start a business, when we run a business, when we run a team, we’re good at something. And many times when we think we’re good at something, we think we’re good at everything. And we’re not. So the point here is to really be realistic and identify what you do well and what you don’t, what you like and what you don’t, and where you think you’re going to be effective in your business and places that you’re not going to be as effective. You’re better off putting your efforts where you are going to be effective.
So you have to identify all of those things and be open and realistic. Don’t really shy away from calling out things that you may just not be as inclined to do. You haven’t done them. That being the case is because what is faced can be fixed, so if you know where those shortcomings live, you can fix them. Once you understand where those shortcomings are, you can find the right team members to do it. So maybe you understand the shortcoming being within your existing team. We talked about employees and teams, this is where the conversation gets even more in-depth. You’ve got to be realistic in regards to your team, what works and it doesn’t work. And if there are places where there needs to be improvement, let’s improve them with the right team members in place.
Then there are places where you can bring in consultants or new employees. So let’s say, like I said, a lot of business owners aren’t super keen on their financial statements. That’s fine as long as you bring in the right consultants, CPAs, accountants, people that can help you do that position that’s so necessary better. And of course, when you do all of this, you have to consider the costs in your income statement. So you have to always strike that fine balance.
Communicate your plan
Here we are, we have a roadmap. We have really creative step-by-step action plans. We know where our shortcomings are and we are going to solve for them. One thing that is critical, regardless of the size of the company—I actually think this is one of the major jobs of a CEO is to communicate. You have to communicate with everyone. You can’t create plans, especially growth plans, and assume that people are just going to walk alongside you and be your partner. You have to communicate those problems with them. And by communicating obviously your employees, to your partners, to your suppliers, maybe they can be more creative and help you if they know what your plans are. And of course, even your family, anybody in your social circle needs to understand where you’re headed so that they can be better partners with you. It’s best to look at and communicate the overall plans.
You don’t necessarily have to get into every line item, but to basically say, “my goal for my businesses is X, this is my growth plan. And this is the timeline I’m going to set aside to get there.” Because it’s important for people to see the big picture. If you have a group of employees and they don’t really understand where you’re headed yet, you’re giving them tasks and jobs without them understanding the big picture, they’re not going to be as effective. They don’t exactly know what you want of them because they don’t know how they fit into the puzzle of your plan. So it’s important to communicate all of that to everyone.
Collaborate with your team to create individual plans
And then you have to touch base frequently. Don’t communicate once and you’re done. You’ve got to keep that going. You’ve got to have the conversation around what needs to happen together. The thing that matters, as well, when it comes to communication is that you remember it goes both ways. If you have teams, if you have salespeople, if you only have one person, if you have 25 people, it doesn’t matter. You’ve got to make sure that you communicate both ways, you let them know what the growth plan is, and then hear their thoughts. Oftentimes, when people are close to their jobs and positions, they can come up with ideas so you know that what you’re trying to execute is reasonable and can be executed.
So you have to therefore create measures, things kind of like the roadmap that you have for the business as a whole. It’s good to have that for individuals and your team members. You collaborate with them, you talk to them about, let’s say, my example where I want to sell 10% more. And I have my salesperson that I’m collaborating with. If I let them know, together we can come up with ideas on how to close better, how to cultivate unclosed leads, all of those things. And once we do, have them be engaged to create measures that we can maintain and stay on top of on a go-forward basis. So maybe you create weekly plans, maybe you create monthly plans. And maybe many of you already have all of this in place. The idea here is that these plans and these measures have to tuck under your overall plan so they all work cohesively together.
Execute on your roadmap
Now that you’ve communicated, you’ve done all of this great work, you really understand your growth levers, you are committed, you’ve got a roadmap—now you’ve got to execute. And why is it even necessary for me to explain that as an action step? It’s because we all fall into habits. We often have the best intention of doing things one way, and as time passes, we don’t necessarily deliver on what we had set out to. So you’ve got to make sure that you have this roadmap. And the reason why I thought it’s important to have it written down, is that when it’s written down it’s something that you can go back to. And then check frequently to see if you’re on the right track. For someone, for me, it could be a weekly check-in, maybe it’s more frequent or less frequent, but the bottom line is that you’ve got to stay on your own track.
Measure and adjust
Of course, as you pave your way, and as you take one step after another towards your growth plan, it’s important to measure and readjust. Because planning is essential, but plans become obsolete. Why? As you start executing, as you start delivering on your plan, you will come across things that didn’t go quite as planned. And it’s your opportunity to sit back and really take a look and be realistic. Measure at least once a month, maybe you do it every week, but at least once a month you say, for instance, “I was going to sell or close 10% more in my sales.” And so the month ends, take a look: Did you get close? Did you do better? If you did better, are you onto something that is a formula that you can reapply across the board? If you did worse, what were the hurdles or the shortfalls? Because it’s only by understanding and identifying those hurdles that you can create a way to get around them to fix them.
So although you plan, you’ve got to be prepared to identify, fix, and refine your plan on a go-forward basis—and readjust your roadmap as needed. This is your business, this is your growth path. You are going to embark upon this journey, which you may have already started. As you really get better at it, closer to it, deliver results, it’s your opportunity to also adjust to where you think things are going to go. Always collaborate and engage others to readjust your plans. Once you communicate with your teams, you come up with plans together—let’s assume something falls short. Engage them, get them to collaborate, get them to chime in as to how we can clear hurdles or adjust plans that would help everybody succeed. And then stay focused on your ultimate growth goals.
Stay focused on your overall growth goals
It’s like everything else in life, it’s going to take incremental steps to build what you’re looking for. And at the end of the day, there’ll be places where you don’t do as well. Your road may become zig-zaggy. But at the end of the day, if you stay focused—and that’s why the defining of your goal was important at the beginning—if you stay focused on that goal, you’ll find your way there. It will be one foot in front of the other, one day after another. And you will.
So here we are to recap. These nine steps to grow your business successfully are not the only steps, the only places to go. It’s the most specific, the most fundamental things that you can do and apply to your business to get to your goals.
First, define what your goal is. I’m going to pause here for a minute and say, I have had many people, mostly small to medium medium-sized businesses, talk about growth. When we had a conversation, it became clear that really expanding their footprint, going from one location to two, wouldn’t be the best thing for them. What was the best thing for them is to go deep, be more profitable, be more agile, better at what they have. So it’s important to know which way you can go and want to go. So take your time to really think this one through. In my opinion, build something that’s fundamentally sound. That you really understand your growth levers and grow from there.
Two, know your numbers. Know your numbers. I don’t think there is a CEO of a large company that you can interview, even if you go to publicly held companies, that does not know his numbers or her numbers. Know your numbers. Know what makes you money. Understand how you earn sales: How do you generate interest and make those interested parties and people that want to buy from you? By understanding all of that and your ultimate goal, know what growth levers you can pull. Be realistic: What can you do? Think of the timeline you can do them in. And by doing that, create yourself a roadmap. These are the things I’m going to do over these periods of time. And as you do that, really be realistic to yourself. Are there any shortcomings? Are there any holes here on my team? The way I do things, do I need to bring in others to try to help us get to our goals?
Then communicate all of this with everybody. Everybody that touches your business, that can be a good partner, can help you collaborate and get to your goals. And then execute. Don’t forget, this is your goal. This is what you want to do. Take those action steps. And of course, it is not intended to be cast in stone for eternity. It’s intended to be a living, breathing process. That means, measure what has worked and hasn’t worked, readjust, and stay the course. Because once you do, you will get there. Thank you.