Are You Ready To Grow Your Business? (Part II)
In our last post we examined the personal qualities you'll need to make a success of expanding your business. This month we move away from character traits to focus instead on the professional aspects you should have covered off before considering growth. Number one: put your people first. We've already established that you're ready to scale up, but is the team around you able to cope with the increased responsibilities and pressures this will bring? And what about the people outside your company? Do you work closely with a manufacturing partner, for example, who might be swamped by the additional orders? And how about that freelance marketing graduate who's handling your promotional campaigns? Will they be able to fit extra hours around his or her other clients? Make sure you're all onboard before making any firm decisions - or be prepared for a backlash further down the line.
Of course, there's another group of people who are just as important when thinking of taking the next step: your customers. The obvious clue that you're destined for bigger things is if customers start coming to you. The early days of a start-up company are usually spent actively seeking new clients. When you start fielding requests from them, however, you can be pretty confident you're onto a good thing.
Thirdly, set your expectations. Although growth is an exciting prospect, keeping your feet firmly on the ground is vital to your future success. Be discriminating in terms of how much growth you can handle. Weigh up new markets against your existing infrastructure, bigger premises against the cost of the build, etc.
A good way to do this is by evaluating how your business is currently performing. Doing a SWOT analysis should help. The acronym stands for:
What are you doing especially well? What resources do you have that other businesses don't? What are your firm's main competitive advantages?
Where do you struggle? What areas in the business let down the rest of the firm? Where is there room for improvement?
What new market trends can you capitalise on? What customer changes have you seen recently (spending habits, demographic etc)?
What are your closest competitors planning for the future? Are there any new rivals to gauge? Is there a threat from planned regulatory change?
When evaluating your company in this way, it's imperative you don't exaggerate. The data must be based on real facts and proven results. At the same time, don't be too modest when analysing your strengths or you could overlook a key area to capitalise on.
Finally, figure out your finances. A serious deficit in cash flow could irreparably damage your business so be confident that you'll see a relatively speedy return on investment, or you have enough funds to see you through a longer wait. Troy Hazard, author of Future-Proofing Your Business reckons it typically takes at least four months for the coffers to start being replenished. He told Entrepreneur magazine: "Growth costs money, and a lot of people forget that. You cannot be ready to grow unless you're in a position to carry the business until the sales catch up with the investment."
Check out www.more-for-small-business.com/sample-swot-analysis.html for a sample SWOT analysis. This should show you exactly how to use the model in your strategic growth planning. Of course, this is an example only. The SWOT you create should be tailored to the unique organisation and markets you work in. Once you've done your first SWOT analysis, it's useful to refer back to it regularly and update it annually.
For a slightly different spin on business growth, the www.smallbusinessbonfire.com/business-growth article is well worth reading. Rather than concentrating on the telltale signs your business is ready to expand, this examines whether your organisation might already be growing - but well before you're ready for it.