Growing your business is exciting. You and your team strived to reach this stage with hard work and determination. Even if you’re happy with the current state of your business, you should keep looking for ways to develop. The secret is being prepared.
In this article, Amy Roberts, senior business development manager at Spotcap, provides us insight on what entrepreneurs should consider before embarking on the journey.
Understand your business environment
The first step to take is asking yourself a series of questions. Is there an increased demand for your product or service? How much additional funding will you need? Do you have a plan on how to spend it? Honest answers can help you make a realistic decision on whether it’s the right time to grow.
Once you’ve decided to take this next step for your business, getting to know the ins and outs of your company and competitors becomes essential. Take the time to research and get a good grasp of the industry or environment you operate in. A good practical step to start with is a SWOT analysis, where you look at your strengths, weaknesses, opportunities and threats. Let’s break it down into smaller steps:
Strengths–What are the positive attributes your business has that give you an edge over your competitors?
Weaknesses–What are the circumstances that hold you back from performing at an optimal level?
Opportunities–What positive factors can give your business a chance to improve its performance?
Threats–Are there any external elements that might jeopardise your success?
Thinking about these factors will make it easier to put together a clear step-by-step strategy. And don’t forget that circumstances and your business environment can change at any time, which is where a contingency plan will help you prepare for unexpected events.
Find the funding that’s right for you
Securing finance is the next crucial step–one which might seem daunting if you don’t know what’s right for you. Beside traditional loans and grants, there is a myriad of financial products that are designed to meet different types of business needs: online business lending, asset-based lending, crowdfunding or peer-to-peer lending.
Some growth opportunities will need more funding than others. For example, if a customer commissions a larger than expected order, you might require a loan quickly to bridge additional expenses in the short-term. In this case, it would be best to turn to alternative funding products, such as business lines of credit, invoice financing or merchant cash advances. If, however, you plan to make a large-scale investment like purchasing new property, then a traditional, long-term business loan would more appropriately fit your needs.
Having a good understanding of your business plays well into this step. Once you’ve determined what your goals and needs are, you’ll be able to decide on the most fitting product. There are many resources available online, but don’t forget – you can always ask for advice, be it from your accountant or a financial adviser.
Prepare your staff
Growth applies considerable pressure on every part of your business, most noticeably on your team. When you plan to scale up, you also need to consider the impact this will have on your employees. Rapid growth might look like a sign of success, but it also has the potential to create a high pressure environment, resulting in burnout.
To counteract the added demand, you should begin recruiting before you begin to scale. Alternatively, consider temporarily outsourcing tasks by hiring a freelancer. You don’t want to set out to grow, only to end up losing your employees in the process due to too much stress.
Victor, a marketer from London, confirms that this can easily become the case: “I worked for a company that was growing rapidly. Our number of users doubled but our team stayed the same size. After six months of working 12 hour days, a third of us resigned.”
Use Technology to help you
Admin can be time-consuming, burdensome and not at all inspiring. But it’s necessary–without a robust back office, a growing business risks dealing with unnecessary setbacks further down the line.
The good news is that technology can help automate a large portion of administrative responsibilities, like book keeping, invoicing and HR. You can also make it easier to manage your business while travelling-why not integrate a digital solution for document signing and management, or an online platform that organises all your payments and invoices? The right software can allow you and your staff to invest more time where it really matters.
Go with your own timeline
Growing your business doesn’t need to be a short and fast process. Rushing through changes can damage your performance and negatively impact your bottom line. You should choose a pace that fits your specific situation, allowing you to respond to changes and deal with additional workload. This way you can manage expectations more effectively and prepare for increase in pressure from customers, suppliers and employees.
In the end, much like entrepreneurship, scaling is about calculating risk and preparing. Make sure you and your staff are ready to take on this new challenge, and you’ll be able to keep your business moving forward!
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Originally published on Small Business Advice Week on 31 October 2017.
Originally published October 31 2017 , updated May 31 2018