Upon interviewing a number of small business owners and entrepreneurs, the Nashville Business Journal recently provided these practical and beneficial steps to help small-business owners grow their companies. We offer these small-business tips from the Nashville Business Journal, as well as some insight from Business.com. "Some will help you work on your business, others will help you work in your business."

(Also, see this issue's Avoiding 5 Growth Traps, and More)

1. Know your numbers
Before you draw up, amend or revamp a strategic plan, take a hard look at your numbers. Specifically, look at growing revenue, but more important, increasing profitability. Companies need to ensure they're not only growing revenue for the sake of growing revenue. The growth should be contributing to a healthy, more profitable company. It is critical for businesses to understand the key performance drivers and put processes in place to monitor and manage those on a daily basis. Managing a budget leaves you with expectations that can be compared with actual performance, so issues are identified more quickly.

Once these building blocks are in place, executives can move on to a strategic plan for growing the company.

2. Forecasting
Knowing where you're going in business before you get there is a valuable asset. However, a significant number of business owners lack the tools necessary to map a successful course. As a result, they often find themselves slaves to the market's whims.

Nevertheless, there's help. "New tools for business forecasting are surfacing that can help you make sense of the seemingly endless tug of war between the variables in the cost-reward equation," the Nashville Business Journal said.

Of course, no forecasting model can offer total accuracy. However, by helping you allocate time and money more efficiently, a good one can be the difference between slow or no growth and double-digit success.

In addition, Business.com recently advised, moving your budget online and doing some serious forecasting will gain reporting tools and insight that help you direct your organization's success. Accounting and budgeting software will help streamline accounting, purchasing, sales, inventory and other tasks.

Likewise, don't forget to build a cash supply. "No amount of planning can prevent a recession, natural disaster or, in some cases, the loss of a large client," the publication recommended. Simply having 30 days' worth of cash on hand "could be the difference between sinking or swimming. The younger a business is or if it's in an industry that's fairly volatile, you're going to want to have more cash available." Also, consider seasonality: "If you know there will be slower months, build a cash cushion into your budgets."

3. Tracking
Competitors' Business
Even as a start-up company matures, tracking the competition should remain a priority.

In order to "find how you stack up in the marketplace," begin by talking to your customers, who often spread their business around to competing companies. Both client networking and sales follow-ups are easy ways to find out where you stand. They are also "key to building the relationship into something bigger."

You also can talk to your competitors. Before you do go digging, though, consider the information you're looking for. Is it product- and/or service-oriented? Does it deal with branding and presentation? Alternatively, are you looking for broader market trends?

Companies not checking on their competitors at least every quarter are missing the boat, Betsy Jones of Profit Sherpa told the Nashville Business Journal. "Your peers could be adding services, changing their approach or suddenly becoming a lot warmer and friendlier with customers — theirs and yours."

Your Own Business
Invest in the basic technologies, such as a solid database to streamline your business. Make sure you can track both your customers and your inventory. Start with simplicity, but don't rule out more sophisticated products and services such as Radio Frequency Tags, which allow you to track your products online and live. Automation equipment, software and supplies will also support inventory control.

4. Staff up for growth; attract and keep talent
Adding staff adds to overhead, yes. "But not bringing in new blood might keep your business from growing at all," the Nashville business publication noted. It is vital to look beyond cost. Sure, the bill for a new employee can rise quickly — beyond salary and taxes, you may need to add office equipment and supplies and pay for training — but you should look at those expenses as an investment.

Employers must work hard to attract and retain talented people. The Internet provides new ways to advertise job openings, match skill sets, train staff and even run background checks. Online job boards and recruiting software can keep businesses ahead of the HR game. You can recruit, screen and hire top local talent all online.

5. Keep your current clients
Yeah, it should go without saying. But…

"It's much easier to retain existing clients than to go looking for new ones," Steve Tisdell, president of The Compliance Partners and a partner in Centre Health Partners, told the Nashville Business Journal.

As well, it is much cheaper. In fact, it can cost up to 10 times more to snag a new client than to service existing business. So keep an extra five percent of your current client base happy, and you can more than double your bottom line.

No matter what you do, there will likely be an occasion when a client is unhappy -- but that doesn't mean the relationship cannot be salvaged.

6. Protect your data
Last year saw several major disasters that "tested the resolve and infrastructure of people and businesses across the globe. Tsunamis, hurricanes, earthquakes, as well as man-made events, all pose a persistent threat that can cripple all kinds of companies."

But saving your data on a regular basis can make your rebuilding effort much easier:

More businesses are backing up their financial, operational and other data, thanks both to growing awareness of business risks and falling prices for the technology involved. In determining what back-up plan to take, examine what types of data you handle, where you operate, where your business partners handling data are and whether they're publicly traded. These criteria will help you get an idea of how much data you can lose and still operate.

Upon completing the analysis, look to buy software and media to back up information. These can range from simple back-up discs to electronically sending data to off-site centers.

Additional
Business.com and the Nashville Business Journal's additional recommendations for small businesses include buffing your brand, or making sure your logo and tagline still accurately reflect what your business stands for; and increasing your visibility online: revamp your Web site, rebuilding it every 18 to 24 months so as to ensure it still serves your needs and goals and delivers the right message to visitors, via compelling content to build connections and relationships and to generate repeat visits. "To move beyond being static, add newsletters and white papers on important industry topics that are content-rich and valuable. Blogs, podcasts, discussion groups and streaming video and audio provide alternative avenues to bring people back."

Dos & Don'ts of Sourcing Overseas
Small companies are increasingly sourcing directly, rather than using intermediaries. Finally, here are both Entrepreneur magazine and IMT's factors to consider.

Do:

…consider carefully if sourcing overseas is right for your business.
…the math.
…enlist a consultant.
…consider hiring an executive with some overseas experience.
…give your source an exact model of what you want produced.
…pay attention to U.S. customs information.
…try to establish longer-term relationships.
…take precautions in protecting your intellectual property.

Don't:

…hang on to preconceptions about other countries.
…disregard immersing yourself in the local culture.
…overlook industry research on suppliers.
…hire a source that is a competitor.
…forget to determine a source's turnaround time.
…underestimate the challenge of logistics.
….let a day go by without contacting your suppliers.

References

Be super in 2006: 10 steps to have a banner year
by Geert De Lombaerde, Roy Moore, Dave Raiford, Judy Sarles, Janel Watson, J. Holly Dolloff and D. Christopher Garrett
The Nashville Business Journal, Dec. 30, 2005

Business.com's New Year's Resolutions for Small Businesses
Business.com, Jan. 6, 2006

On Foreign Soil
by Joshua Kurlantzick
Entrepreneur magazine, June 2005

Related

The Dos and Don'ts of Sourcing Overseas
by Katrina C. Arabe