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Are You Growing to Quickly Horizontally

Guest post by: Manny Nowak

Article Overview: Horizontal growth means working to make your organization wider and wider by opening more and locations. It means development of your customer base by going after more and more new business. It means building your network by going to more and more events held by different organizations. It means building more new products, offering more new services, doing everything for everyone you can.

Are You Growing to Quickly Horizontally

How are you building your organization?

To many times I find people who are trying to build their organizations horizontally long before they have spent enough time trying to build them vertically.

For the purpose of this article, lets define what horizontal and vertical growth are.

Horizontal growth means working to make your organization wider and wider by opening more and locations. It means development of your customer base by going after more and more new business. It means building your network by going to more and more events held by different organizations. It means building more new products, offering more new services, doing everything for everyone you can.

Vertical growth on the other hand is digging deeper into what you have. It means taking your existing location and working harder and hard to grow the business in that area. It means working your customers for referrals and leads and looking into their organization's to see how much more work there is for what you provide. It means working your current networking organizations harder. Getting to know more people in the organizations you are already involved in. It means spending more time, effort, energy and money on making your existing products and/or services better.

The problem is that to many times it is easier to grow and build horizontally. To many times it is much more fun and is so much more exciting. That is why we get sucked into horizontal growth long before we are ready.

What I want to tell you today is that most times we need to stop and make sure we have the strength in our vertical before we try and get horizontal.

Let look at what happens when we try to grow to fast horizontally. Here are some points for us to consider as we approach the new year.

Locations:

Before we think about opening or expanding, we need to make sure we have pushed our existing market to at least a high percentage of what we feel it can do. Why do we want to go to the expense and effort of another location when we have so much opportunity where we are. Why split the resources we have. A second location will cost us more money, it will thin our resources, it will cost us time, effort and energy, exponentially.

Yes, there are times to expand. But when we still have so much potential where we are, why not work that?

My partners and I brought out part of a computer consulting company and opened a new firm. We were all so excited and ready to build the greatest company ever. But early on we made a very critical mistake. Instead of building the single location which we had purchased, which was making money, which was supporting us and had plenty of potential, we decided to open 2 more new offices. It was so exciting. In fact, we even said why not 3 new offices. The problem, within one year we were in major trouble because we did not have the money, time or resources to support that horizontal of an organization.

Customers:

So many times we put all our effort into getting more customers, when our existing base still has so much potential. The existing base already knows what we do well. They already love us. Why are we not putting our effort into them. Why are we not trying to expand our business with them first?

In one organization I worked with we were able to increase sales 70% in 18 months, simply by expanding the business we did with our existing base.

Networking:

So many times we think we have to join every organization there is. We have to attend all the events they have. We have to meet more and more people so we can create a super wide network. But what we create is a wide network with little strength. Maybe it might make more sense for us to find a few organizations and get really involved. Get to know the people who are there. Spend more time doing one on one meetings.

I remember at one time I was part of so many organizations and going to so many events. Yet business was not growing. Why – because I was not digging in with the people I was meeting. Getting to really know them. Building excellent relationships.

Products/Services:

To many times we try and do it all. We start with a product or service and before we spend enough time effort and energy developing the market for it, we are off getting into another product/service. Then another, then another. Any of this sound familiar? Problem is we get so horizontal, before we know it, we have 20 products. Before we know it, we are doing 10 services. But are we doing any of them better than anyone else?

In my experience, those who are focused on a very defined vertical market are doing so much better. The organizations that have done great over the years – very focused.

Vertical growth is key for most of us.

It does not mean we cannot expand, but first it is important we make sure we are profitable vertically.

It means keeping a single operation until we have to expand – it is amazing how much more profitable we can be.

It means working our customers harder and harder for more business – they already love us.

It means committing to a few networking organizations – what we find is we get so much more business that way.

It means commitment to one or two services or products and commitment to doing them so much better than anyone else. It means becoming known for what we do.

Horizontal or vertical? This is a critical area for you to examine as you get ready for the new year. Spend time, effort and energy here. Be honest with yourself and your team.

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Article Tags: business coaching, business consulting, business planning, coaching, growth, sales



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