Growth happens differently in every business and you should prepare well before entering into a significant growth phase by considering the impacts that growth can have. How and when you want to grow your business should form part of your overall business strategy. Working hard to generate positive word of mouth, brand awareness and maintaining an excellent business reputation is essential in opening up opportunities for growth.
Not all businesses find that they grow naturally, just by doing a good job with their current customers. Many business owners instead find that they need to deliberately encourage growth through marketing, advertising and sales activities. However, slow growth can be of benefit if your business has resource constraints, including lack of finances or the right personnel to grow the business.
Growth can impact on many things, including:
• management time and resources
• systems and processes
• customer relationships.
Unfortunately, necessary preparation for a smooth growth period is not always carried out. This could be as a result of sudden, unexpected growth or just an inadequate amount or lack of forward planning, and can lead to difficulties if growth happens too quickly without a business being properly prepared. When thinking about growing your business, there are a number of questions you need to consider.
The first question to consider is why do you want to grow your business? There are other reasons besides profit which may motivate a business owner to seek growth. Some of these reasons could include:
• gain economies of scale
• ability to service other markets
• overtake a competitor
• to leave something to the children.
You should also consider: where will the growth come from?
Growth can come from a number of sources including:
• expanding the range of products and services offered
• expanding the range and type of customers the business attracts
• growing your market share by taking customers from a competitor
• expanding capacity to service more customers
• entering new markets (like expanding interstate and overseas)
• acquiring or merging with another business.
Each source of growth comes with a list of pros and cons, and entails a cost to the business, in terms of both time and money. This needs to be properly assessed before a path is chosen.
Another important question is: where will the customers come from? Are they existing customers, customers of another business or those who are not yet customers at all for your product or services? Answers to these questions will guide decisions on how to find and successfully target new customers.
The next question to ask is: how will sales be conducted? The answer will define the marketing, advertising and sales strategies required to bring increased customers to the business.
In addition, consider: how will the business manage increased sales? This question looks at the capability of the business to handle growth, including physical capacity, staff resources and skills, administration support and management experience.
Once you have answered these questions, it is important to document the answers in a growth plan or business case that could be added to the existing business plan or created specially for the purpose.
Growing a business can be a very exciting and rewarding experience. It can also be very challenging and have risks you are unfamiliar with. It is important to remember that the people, skills, resources and systems that work perfectly well for a smaller business may not be as effective when the business grows.
Here at The Quinn Group our team of lawyers, accountants and financial planners can assist you in planning for the growth of your business, as well as helping your business to reach its potential. For more information on business growth or for any other enquiries submit an online enquiry or call us on 1300 QUINNS (784 667) or on +61 2 9223 9166 to book an appointment.