When Is Expansion Worth The Risk?
Knowing when your company is ready for expansion is a key step in developing your business growth strategies. Either making the move too soon or too late can be a detrimental factor in your success.
Innovation Automation, a Barrie, Ontario company that has seen tremendous growth this past year, has established best practices that have contributed greatly as they determined the right time for expansion.
Dealing primarily in the automotive industry Innovation Automation is a system integrator dedicated to providing industry with factory automation. The company has been in business for 26 years, originally started by a partnership of three, two whom have retired leaving Steve Loftus the principal owner. I had an opportunity to chat with Steve on the company’s expansion and growth.
In the past 12 months Innovation Automation has grown from 53 to 99 employees with another 11 coming on board. What’s been the cause? SL: Since the ownership change I’ve become more aggressive in the market place. In the past we had a strong focus on Southern Ontario. We critiqued how much international business we’ve been doing and made a global move. In the last 18 months we’ve sold to Brazil, Mexico, US and Canada. For us, the venture of going after more foreign work has been the biggest reason for our growth. We also took over another building providing us increased capacity. It’s a snowball effect; it’s a big commitment to take on more space and bigger jobs.
Why is it worth taking the risk to expand?
SL: If you are not growing then you are going backwards. The company went through quite a few years not growing. Looking at our growth projections 10 years ago, we are only just slightly ahead of that now. We were stagnant for so long, at a threshold where we were filling this building. The next step had to be major. The opportunity came along to take on a large project that allowed us to move to the second building. Five years ago we did our five year projection and we are now slightly ahead of it.
Implementing the right processes will determine when you can expand. What procedures did you put in place to prepare for expansion?
SL: Solid succession planning makes expansion possible. We restructured and created lead hands for each area. You need to use all of your senses when you work; it’s an advantage to having a guy there to provide feedback. If something doesn’t feel right or sound right you stop working. This also makes our processes stronger in quality control and safety. We increased our sales staff and we spend a lot on training. We hire youthful people, running college level engineering graduates through trade apprenticeships. We believe the machine builder of the future needs to be technically more competent.
Their routine and programs for quality control and safety are working. At the time of this article Innovation Automation received designation as Canada’s Safest Employer for Youth.
For small or medium sized businesses that are considering expansion, Steve offers the following advice: “Put the right people in the right jobs.”
Jane is Editor-in-Chief and writer for Sunday Crush. She lives in Barrie, ON