Inland Empire businesses want to expand, but they don’t know how

That’s why the Inland Empire Center for Entrepreneurship at Cal State Bernardino on June 1 is starting the Catapult Business Growth Network. The program will bring local business owners together for a series of six day-long workshops designed to teach them how to grow their business, said Mike Stull, director of the center. The ideal candidate is someone who has owned a business for a minimum of two years, employs at least two people and is generating more than $1 million a year in revenue. Stull spoke with iebusinessdaily.com recently about why the program was started, how much interest it has generated and whether or not every business wants –  or needs – to grow.

       

Q: Where did the idea for this program come from?

A: In our most recent report on state entrepreneurship in the Inland Empire, growing a business was one of the highest concerns. A lot of people want to do it but they need help, so we started putting Catapult together. We hope it becomes a permanent program.

Q: Why will you be putting people in groups?

A: We’ve found that’s where you get the best exchange of information and people to learn the most. We will start with groups of three and then move up from there. People also told us that they would most like to meet with their peers. They thought that’s where they would get the best information.

Q: What response have you gotten?
A:  We have nine applicants so far. We’re moving into the public relations phase now, trying to get the word out.

Q: Do all businesses want to grow?

A: Most of them do, but not all. Some of the small businesses, the ‘mom-and-pop’ operations, become profitable and the people running them are fine with that. They don’t want the hassle of getting bigger, they’re satisfied with where the are, and that’s OK.  What’s important is to know that all businesses experience growing pains, and they all have a ceiling. What you have to figure out is the best way to punch through the ceiling.

Q: What do you mean by growing pains?

A: I mean a business that grows, but not in the way you planned or the way you want it to grow. It grows in ways that are out of your control. I teach a class on this, how to recognize the signs that you’re out of control, and what to do about them.

Q: What are those signs?

A: Understand that I’m talking about a startup. You do well at first, you become profitable, but then you might start to see a decline in profits. You’re working 18 hours a day but you can’t get to the next level. You reach a point where the business is controlling you, and you don’t know what your goals are. You have an idea where you will be in six months or one year or three years.  It becomes too difficult to get things done, and you start wasting time. You want to grow, but by this point, you can’t do it.

Q: How do you correct that?

A: You have tools, and a process in place, to keep that from happening. We’re going to show ways to do that, and all of them are pretty simple. You have a written plan, and you make sure your people understand it and that the criterion for meeting each goal is spelled out. You put together an accountability chart, and you make sure everyone is held accountable, all of the time, including the owner.

Q: Any other recommendations?

A: Establish a set of core values and make sure everyone understands them and follows them all of the time. Ask yourself why you’re doing something. If you’re hiring more people, ask yourself why you’re hiring them and whether they will fit into your culture. If not, they probably aren’t the right people to hire. We’re also going to deal with meetings.

Q: How so?

A: You have to have them, but it’s true that a lot of times not much gets accomplished in a meeting. They should be held in the same time and the same place every week, and they should be held to 90 minutes.

Q: None of this sounds groundbreaking, or even very sophisticated.

A: It’s not. This is all simple stuff, just common sense, but it works. That’s why we’re going to teach it to people.

Q: Is it not true that a lot of businesses go under because they try to expand too fast?

A: Absolutely.  Expanding too quickly is one of the cardinal sins of business. We tell people that you can’t do five things great at once, that you should find one thing you do really well and focus on that. Do that over and over, establish yourself and bring in the extra stuff later.”

Q: That sounds like a good description of In-N-Out Burger.

A: Yes, it is. They have a simple menu that they’ve stuck with for years, and they have great locations. They could have a lot more restaurants than they have, but they’ve expanded very carefully. They’ve stayed focused on Southern California, although they do have have some restaurants out of state now.
Q: It also helps to have gotten started in 1948, particularly when you’re talking about locking up the best locations.

A: Yes, that’s true.

Q: Do businesses expand for reasons besides making more money? Are there other reasons they want to expand?

 A: Yes. Very often the reason for expansion is self-preservation. There is potentially a real liability in staying small because a competitor can leapfrog over you and then you’re really in an uphill fight. You expand to protect yourself.

 Q; Is it easier or more difficult to grow a business than it used to be?

A: I think it’s easier now because there’s so much more information available, mostly because of the Internet and social media. There’s more information to help you make decisions, but don’t start thinking you know everything. That’s when you get in trouble.