* Guest Post by Jock Purtle *
Running a business is a rewarding and exciting experience. However, life as an entrepreneur can be very challenging too. Not only do you need to constantly optimise your products, and explore new opportunities, but business owners are constantly on the hunt for new sources of growth too.
Once your business starts to do well, it’s natural to start planning for the road ahead, and thinking about what you can do next. Of course, just like launching your business, growing a company comes with a certain set of obstacles you’ll need to overcome.
By asking yourself the right questions, you can make sure that you have the right plan and focus in place to accomplish your goals. Here are just some of the questions you’ll need to consider before you’re ready to take the plunge.
How Well is My Business Doing?
Probably the most obvious question to ask yourself when you’re thinking of expanding your firm, is how well are you doing so far? Some business owners rush into an expansion because they see competitors and other firms around them growing. However, if you don’t have the right foundations in place to launch a successful growth strategy, you could end up in serious trouble.
Before you start looking at the other opportunities that might be possible with your company, make sure that your current business plan is going well. Sit down with your accountant and look at your profits and losses from the last 6 to 12 months. Examine your customer base and see whether you’ve had any significant growth in the same period. Make sure there’s a clear demand for whatever you’re selling before you begin to invest in growth.
Do I Have a Strategy?
With a little luck, when you first started your business, you’ll have designed a business plan that outlined what you wanted to do, which customers you were going to target, and how you were going to market yourself. Now that you’re ready to grow, you’ll need to create a new plan that takes your new vision into account.
With growth on the horizon, there’s a good chance that your business mission has changed. To begin with, as a small company, you might have assumed that optimised blog posts and Google Analytics were enough to drive your advertising campaigns. Now that you want to grow into new markets, that may mean looking at new opportunities, like PPC or social media marketing.
Growth also means figuring out whether you have enough resources in-house to create your products, offer your services, and support your customers, which brings us to our next question.
Which Resource Gaps Will You Need to Fill Immediately?
A bigger business means more customers, and that means that you’ll need extra help to keep everything running smoothly. Before you can successfully grow your company, you’re going to need to know where the gaps in your resources are, and how you can fill them as efficiently as possible. For instance, do you need to outsource customer service work to some extra people? Will you need a professional to help you manage your accounts, now that there are more numbers to deal with?
If your workforce is growing, how are you going to manage things like health insurance, payroll, and even time management without spending more time working “in” your business than you do working on it? Many companies in the process of growth or expansion end up seeking help from a PEO (professional employer organisation) that can handle all of the complex HR of a bigger business on their behalf. A PEO can manage a lot of the tasks that would otherwise take up your time as a business leader, like risk management, recruiting, and onboarding and benefits.
How Will the Growth Affect Operations?
If you’re new to the business world, it’s easy to assume that a larger business will involve many of the same processes and operations – just at greater volume. However, you may find that things like customer service, supply chain management, and even production measures that used to work for you in the past, are no longer cost-efficient when you start to grow.
Look at the way your business currently works and ask yourself whether the strategies you use today will sustain you tomorrow. Do you need to find a way to bring more efficiency into your production cycle? Do you need to find better wholesalers who can offer reduced bulk prices? If you’re expanding into new locations, you might even need to consider working with new shipping companies who can take your parcels further than your local area.
Do You Have the Finances in Place?
A lot of entrepreneurs underestimate the cost of growing a business. They find themselves getting so caught up in how much money they could make with a bigger market share, that they forget that they need to invest money to make money. Look at costs like:
- Buying new facilities
- Paying for human resources
- Creating additional inventory
- Purchasing extra supplies
- More shipping costs (particularly for international markets)
Once you’ve created a list of all the expenses associated with your expansion, compare the price of growth, with the potential outcomes. If you know you can get a good return on investment, you can start looking for the funding you need, either in previous profits or from investors.
Is the Market Conducive to Growth?
Making the choice to grow or expand your business isn’t a small decision. You’ll need to find a way to build upon your existing success, tap into new markets, and explore new opportunities, all without harming the brand identity you’ve worked so hard to build. Expanding a customer base without compromising what you’ve already created can be easier said than done.
Even if you get everything right internally, you’ll still have a hard time achieving your goals if the market isn’t in a good position for growth. If there are countless competitors in your space offering the same product as you, for the same price, then you might need to look for a different avenue of expansion. Competitive analysis will help you to find the gaps in the market that are primed for your business.
Are you Ready to Expand?
Finally, when you’ve finished all the logical planning required to ensure that you’re ready for expansion, sit back for a minute and think about how this new challenge will affect you and your team mentally. Are you and your team ready for the challenges that growth will bring?
A bigger business does mean more opportunities, but it can also come with more work and more stress too. Before you commit to anything, make sure that the people responsible for pushing your company growth forward are ready for the expansion. Ask any questions that might be lingering on your mind, and make sure that you don’t have any doubts holding you back before you jump into action.
While it’s normal to be nervous, the questions you’ve asked above should pave the way for a confident next step in your business plan.