Entrepreneurship can be an enriching experience. But it comes with many challenges. One of these challenges is ensuring your small business grows over time.
But growth is a tricky thing. If you don’t plan for it and manage it well, it can get out of hand. On the flip side, there are times when your expansion plans could use a boost.
This 7-point checklist will ensure you have a roadmap to ready your small business for growth.
1. Clarify your goal
The first step is to have a clearly defined goal for growth. This can help you identify the steps you’ll need to get there. Besides, it can help you plan for the potential pitfalls that may arise so that you’re primed to mitigate these problems if they happen.
2. Know your numbers
Remember that expansion takes time and money, with returns often coming after a long gestation period, so you must be sure you can afford it.
Review your finances to ensure that you are on top of your numbers. Find out what ROI your investment in equipment will bring in. Or if you have the cash flow to take on a big client with delayed payment terms. Let this data guide you in formulating your expansion plan.
3. Consider financing options
If you need financing to fund your expansion, the time to seek it is before you need it. Discuss your expansion plans with your banker. Besides helping you explore financing choices, they can recommend financial management tools to assist you in the growth phase. Remember that as your plans evolve, your banker can become a valuable partner in your journey to success.
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4. Reassess your vendors and partners
If your success depends, in part, on other companies, ensure they can keep up with your growth. Find out if your current suppliers can quickly turn around larger orders or if your distributor can accommodate an expanded distribution area. If they can’t meet your growing needs, it’s time to find a partner who can.
5. Conduct market research
Review and research your market by conducting competitive analysis and customer studies. When introducing a new product or service, it becomes crucial to understand the needs of your target customers and the competitive landscape.
Similarly, if you’re contemplating an expansion to a different location or demographic, peruse market research to confirm an adequate customer base that will sustain the business expansion.
6. Make informed hiring decision
Growing your business also involves expanding the team, which entails considerable expense and risk.
Talk with your team first to understand the personnel gaps they’d like to fill. It’s also essential to compare the cost of a new hire with the revenue you expect to gain by adding the employee. If the expense outweighs the benefits, consider hiring a part-time or contract employee or explore if a technology upgrade could enhance productivity.
7. Keep company culture top of mind
Ensure the business owner maintains a strong focus on preserving company culture during expansion. As you expand, cultural continuity is critical. Employee engagement, hiring and retention, and, of course, performance and productivity all depend on having a consistent and positive company culture. Besides, it will shape the future of your organization and determine your ability to achieve your growth objectives.
The final word
Small business growth can take various paths. Consider opening new locations for improved distribution or production or expanding overseas. Regardless of the direction, the guidelines mentioned can make the expansion process much smoother.
This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact us here.
