Turning Your Company into an Empire

At some point, ever business owner and entrepreneur must ask themselves if they are happy with the status quo of their little creation or if they want to grow their small business into an empire.  Sometimes bigger isn’t always better.  With a larger operation comes more expenses, more complications and more stress.  If done properly, it can also mean more money which is what ever business owner ultimately wants.

When a business is operating at optimal efficiency with very little waste, then an increase in volume will usually translate to an increase in profits. However, there are a lot of other factors to consider when building your empire.  These factors can determine whether you’re successful or not and even if you are successful, they can determine the speed in which it takes you to build your empire.  Some important things to consider are as follows:

Capital

In order to grow a business, you will unquestionably need additional working capital.  There are two different ways of obtaining capital for expansion.  You can either grow slower with your own money or grow faster by borrowing money. 

If growing your business involves opening new locations, one safe way to expand is to wait until your existing business has generated enough revenue to open the new location without having to tap into other resources and without causing a financial strain on your existing business.  Once that new location is financially stable and self-sufficient, you can put the profits of that new location aside until you have enough to open another location…and so on.  This is similar to the strategy that some people have when they go to a casino and put their initial investment in their pocket and only gamble with their winnings.  This is a slow but safe strategy in building your empire.

Borrowing money has its advantages also, depending on the terms of the loan.  Growing faster may give you an edge over your competitors before they beat you to it.  It’s also risky if your expansion plans don’t work the way you expected them to.  Be leery of personal guarantees and high interest rates.

Strategize

Before you commence your expansion plans, consider what could stop you and be prepared for these variables.  They could be industrial trends, shifts in consumer awareness, regulatory changes, political interference, competitors, etc.  These scenarios may vary depending on the industry.  It’s up to you to predict what might go wrong before it does so you already have a plan to deal with it.  In order to successfully build an empire, you must be unstoppable. 

Establishing preventative measures can divert disasters.  Consult with your attorney about your plans to see if there will be any legal ramifications to them.  See if others have attempted to execute similar expansion plans in your industry to see if they had encountered certain obstacles.  Remember that running out of cash may be your biggest threat so don’t try to grow your empire too fast.

Know Who your Enemies Are

As you grow your empire, you will notice that you have somehow gained enemies.  These are people that, for whatever reason, do not want you to succeed.  Preventing these people from stopping you is critical.  They can be competitors, politicians or just people within the community that you plan on expanding your business into.  Once you’ve identified who your enemies are, the next step is to find out why they want to stop you.  This will give you some insight as to how you will prevent them from interfering in your plans.  Sometimes, unsuccessful people just hate to see other people become more successful than them.  These people are less of a threat than your enemies who have the political or financial means to install a speed-bump on your highway.

Never forget that your competitors are, in most cases, your biggest enemies.  If they see you pull ahead of them, they may try to stop you.  I’m not suggesting that you become paranoid but realize that your competitors have everything to gain by seeing you lose.  In order to be one step ahead of your competitors, you must offer everything they do and more.  You must give your targeted clients a reason to want to come to you rather than your competitors.  It may seem like a simple concept but many business owners lose sight of this.

Not Every Empire Must Fall

Once you’ve grown your business into an empire, keeping it massive will be challenging.  Your operation will undoubtedly become more convoluted and bureaucracies may begin to form.  Establishing a check and balance will be necessary to ensure systemic problems don’t take over and things don’t fall through the cracks. 

It’s also important to watch your money and know your numbers.  When revenue is not a problem, look for problems elsewhere.  Money has a way of masking problems in other areas.  Money can put a bandage over operational deficiencies that are hemorrhaging cash from your company.  This is a natural problem that often occurs with companies that have a lot of money coming in.

Also remember that people love to see the guy at the top come crumbling down.  It’s the King of the Hill effect.  Everyone wants to knock the guy off the stump.  The terrorists didn’t attack Monoco, Malta or Grenada on 9/11…they went after the country with the most powerful army in the most populated city.  Once you’ve built your company into an empire, you will now be on the radar of enemies you didn’t even know you had.  Take whatever measures necessary to make sure they cannot knock you off your stump.

Also, don’t become your own enemy.  This may seem unlikely but some companies get so big, they can’t get out of their own way.  Becoming cumbersome and unmanageable is a common occurrence in larger companies, particularly ones that grew too fast.

Arrogance is sometimes the worst quality of the leader of an empire, whether it be a government or business.  Recognize that you can lose your empire at any given time if you make a critical mistake.  You can prevent this with a little humility and by considering the advice of smart people around you, such as your executives and directors.  Even though most empires are led by one person, it’s usually best for that person to have a team of advisers who can collaborate on sensitive issues.  Learn from history and don’t ever let an over-inflated ego weaken your empire.

For more information on how to turn your company into an empire, please contact Ashlar Consulting Corporation at 305-849-9399 or visit www.AshlarConsultingCorp.com.