Business Strategies:
The road to growth is paved with planning

Marcia Heroux Pounds
South Florida Sun-Sentinel
March 18, 2002

"We're gonna grow or we're gonna die," an Inc. 500 business owner told growth expert Steve Little.

Growth is serious business. Today's economy is a time of opportunity for small businesses. It may be a time to sell your business and move on, or it may be time to acquire other small businesses and expand.

Little, who recently talked to small business owners in South Florida for Inc. magazine, has been president of three fast-growth companies in the past 15 years.

To grow successfully, he says, business owners need to keep on top of major trends, improve their processes through technology, continually revise their business plans, and outsource certain parts of their businesses.

Planning is a critical step to growth.

"Eighty percent of Inc. 500 companies have a strategic planning process in place," Little says. Compare that, he says, to only 12 percent of small businesses.

Business owners often don't write a strategic plan because they think they don't have all the information. "Don't get caught up in what I call analysis paralysis," Little says. "You never have all the information."

In making a plan, small businesses need to gaze into their crystal balls. To do so, keep up on trends that are bound to affect your business.

These trends include the "graying of America." In 2001, the average American worker was over 40. This trend has ramifications for businesses you're selling to and buying from, Little says.

Another trend is the growing number of U.S. residents whose first language is Spanish. If you want to compete with the Spanish-speaking business owner who opens a similar business down the street, Little says your staff needs to be able to communicate in Spanish as well as English.

"Vas a hablar espanol. You're going to speak Spanish," Little says.

In tracking trends, look for ideas from businesses in the San Francisco Bay area, Little says. "The Bay area has been the leader of trends. It happens to us five years later."

If you own a retail store, for example, find out what operating systems a Bay area retailer is using. You'll have an edge on the competition, Little says.

As your company becomes larger, you should consider outsourcing some functions. These may include information technology, payroll and other human resources functions.

Michael Alter, who directs business development for SurePayroll.com, an online payroll service, says 78 percent of the site's customers are very small businesses with nine or fewer employees.

SurePayroll.com gives these reasons why business owners decide to outsource payroll:

• Avoid IRS penalties. According to the IRS, 40 percent of small businesses pay an average penalty of $845 a year for late or incorrect filings.
  
  
• Reduce costs. A small business with 10 employees typically will spend $2,600 a year in direct labor costs associated with maintaining payroll.
  
  
• Enable direct deposit. Smaller businesses don't always have the capability to offer direct deposit to employees. This saves employees a trip to the bank and error-prone paper handling.
  
  
• Avoid technology headaches. Without the latest software, a small business may be using the wrong version of tax tables, which can result in penalties.