Sustaining my mission with growth
After establishing a stable and successful business model and mission, many corporations see business growth as a natural next step. We’re here to help you ensure that your company’s financials are ready to scale up with your vision.
What are the different growth options for my company?
Once you have decided that you want to expand your business, there are two main growth options available to you: vertical growth and horizontal growth.
Vertical growth involves expansion into different points in your industry’s supply chain, thus expanding your company’s capabilities. For example, a company that assembles and distributes cameras might branch out into the production of camera lenses or cases.
Horizontal growth involves expansion of your current business model. This might mean expanding geographically or widening your existing range of products and services. For example, a women’s apparel company might open more stores around the country, or add a men’s apparel line to its collection.
The direction of growth in which you take your company will depend on your specific business model, and where your unique growth opportunities lie.
How can I make sure that my business model is sustainable for scale?
Corporate growth typically requires a significant resource investment. The smart approach is to ensure your current business model is sustainable before you attempt to scale it up. One way to do this is to set up expeditious operational efficiencies that will help make your production as cost-effective as possible while providing high-quality products. This will ensure that your business scales safely and sustainably.
There are many ways to improve operational efficiencies. The following suggestions have worked for other companies:
- Build data and analytics capabilities within your company, which will allow you to identify and address business weaknesses
- Set up information reporting for all your cash flows, and use it to track and streamline your finances
- Address all your business banking needs through the online Business Banking Center
- Stay on top of technologies and innovations that can improve your operations
Use these suggestions to help you identify opportunities for efficiency improvement in your business model and your plan for sustainable growth.
How can I protect myself and my investments as I grow?
Growth is risky. Business risk affects your future profitability and therefore the value of your investment in growth today. Risk analysis and management—both of internal and external risks—is integral to any growth plan.
Internal risks primarily include risk from employees’ erroneous actions when dealing with customers or your production process. This can be addressed through an effective employee- monitoring system, to make sure that everyone representing your company does so responsibly.
External risks arise not from your company but from your industry, economic or political environment, including:
- The risk of new competition from emerging markets or nontraditional industry entrants
- The risk of credit cost potentially rising, which will make future growth more expensive
- The risk of natural or political disasters causing macroeconomic trends that affect profits
External risks are much harder to anticipate and to address. Because of this, risk management in this sphere should focus on the identification of risks and the speedy and effective mitigation of their effects.