Turning a small business into a big one is never easy. Most businesses start small and stay there. Growing a business can be costly, timely and stressful, but it can lead to greater profitability and new directions.
Some business owners see growth as an increase or shift in the market; some outgrow their current business space; some have new, different or unique products or services to offer. No matter what the reason, you still hope your growth will be a profitable venture.
However, some times small business owners may encounter roadblocks that keep them from growing. Recognizing them and finding ways to overcome them and increase growth is important for long-term success.
Three common roadblocks are micromanaging, hiring the wrong employees, and poor planning.
Micromanaging – In the beginning, small business founders usually have their fingers in just about everything, from sales to billing. The problem starts when the company grows and owners can’t stop from staying involved.
Hiring the wrong employees – The fact is, no matter how much you want to delegate, you won’t succeed if you have the wrong people on staff. When you want to create a growing organization, you have to get the right people.
Poor planning – Many small business owners fail to create a blueprint for success. But once you get to a certain level, a lack of a plan is unacceptable. You need a plan, and that means a strategic vision, supported by a detailed business plan. To get to the next stage, you must have a formula for growth.
How to Do It
Now that you know what might keep your business from growing, here are three things you should do before plotting your course for growth.
Identifying/developing key metrics – Metrics, or indicators, are statistics that help you measure and evaluate your business performance.
Understanding your financials – Your financials tell the story of your business: where you’ve been, where you are, and where you expect to go. Knowing when and where it’s possible for you to spend more to make more, or to spend differently to make more, or maybe even to spend less to make more is how you write the next chapter in your business book.
Effective goal setting – Developing clear goals and SMART objectives for growth is essential. Remember to make them S-Specific, M-Measurable, A-Achievable, R-Realistic, and T-Time Limited.
Ways to Grow
Although business growth can mean a variety of different things to different people, there are a few common methods.
Increase revenues – You can increase your revenue by increasing the number of new customers, increasing the value of each sale made to customers, or increasing the number of times that customers buy from you.
Decrease costs – You can achieve greater profits through more efficient use of your expense dollar. This includes making smart choices about your expenses, getting a better return for your advertising and sales promotion dollars, and improving your internal methods and procedures to control costs.
Increase cash flows – The essence of successful cash flow management is regulating the money flowing in and out of your business. Increasing your cash flow reduces the amount of fixed capital you need to support the given level of your business.
Enter new markets – There are two new market efforts: geographic expansion and customer expansion. Find new customers by bringing your business to a new region or taking your business online, or grow your business by targeting new customer segments in your existing market.
Hire new employees – Hire to grow your business. Be sure to attract top talent and catapult your business above everyone else!
Expand – Through mergers and acquisitions, you can integrate your business with another and share control of the combined businesses with the other owners or you can buy another business and run it.
Increase market share – The process of trying to increase your market share is a continuous one. You can never stop trying to win new customers.
Diversify – Stand out from the crowd and your competitors by adding new products, or even new lines. Diversifying what services and products you currently offer helps you grow and make more money within your business.
According to the Canadian Task Force for Women’s Business Growth, a 20% increase in total revenues among female-owned enterprises will add an extra $2 billion per year to the Canadian economy. That’s pretty significant. With results like that, it’s easy to say, “You grow girl!”