Gearing up for growth
Growth looks different for every business. Whether you plan to grow your business by opening up additional locations, or expanding your customer base, we’re here to help you find the path to greater business success.
How do I know if my company is ready for growth?
If your business is doing well and making money, growth might seem like a natural and exciting next step. Think about what growth would mean to your business operations: what would you have to change in terms of operations, production, staffing and facilities? How easy are these changes to implement and afford?
Look to your market and consider whether it presents any potential growth opportunities. If your growth involves expanding into new geographic locations, make a list of any competitors you might encounter in those areas and examine their current business models. It is important that your growth be sustainable not just internally, but also within the competitive space.
Finally, think about what growth means for you as a business owner. Expanding your business will also mean expanding your own professional life and, perhaps, increasing how hard and how long you have to work.
How do I develop an effective growth plan?
Sustainable business growth starts with an effective growth plan.
First, define your business goals. Try starting with a growth goal that is specific and measurable: this might include, for example, growing your customer base to 20,000 or investing in real estate to opening four more locations in the next two years.
Then, begin putting together an operational plan. List out each element of your production model (from talent to infrastructure to supplier agreements), and examine how each one might scale up with your business.
Next, consider new marketing efforts. Spend time defining your customer base and how that customer base could change or expand from your current audience. You can then begin to plan how you might best reach this new audience. Above all, don’t forget to prioritize keeping your current customers happy.
Finally, develop a clear method to track your growth as you expand. Analyze your finances and operations on a monthly basis. This will allow you to identify and address any areas of business weakness, and ensure that your growth is going as planned.
How can I finance my growth?
Once you come up with a reliable growth plan, the next step will be figuring out which of these three primary sources of capital you can use for your business growth:
- Invested capital from friends, family, venture capitalists or angel investors. This particular capital channel results in investors getting some equity shares in the company’s future profits as well as some say in future business decisions.
- Your business’s own retained earnings. This might be a combination of past profits, left over and saved from previous cycles, and operating cash flow.
- Borrowed funds from a bank or other financial institution, which could take the form of a loan or line of credit.
The “right” form of financing can be one of a combination of the options above. Whichever route you choose, ensure that you maintain strong professional relationships with your funding sources and regularly evaluate your financial health. This will direct you toward growth that is both sustainable and profitable.