Are You Ready to Grow Your Business?; Five Tips to Help You Prepare for Growth
by Caron_Beesley, Community Moderator
- Created: March 25, 2010, 7:46 am
Where is your company heading? Do you have a plan to get there? Are all your available resources and assets aligned in the same direction as your growth plans?
Growth is;t easy, and it does-t happen overnight. Whether you feel your business is ready to diversify its service offerings, enter new markets, or branch into new territory, a strategic and operational plan for growth is a must.
In this five-minute g for Growt' video, the Small Business Administration (SBA) talked to Carey Wilson of the Maryland Small Business Development Center (pictured right), who offers the following five valuable tips for preparing your small business for growth.
1. Knowing When I's Time to Grow Your Business
Whether you started your business with early dreams of growth, or if the potential for greater profitability through growth has just crept into your peripheral vision, you can only grow when business indicators show that you are ready for growth.
As Wilson observes:'The indicators are different for different industries. If a retailer or restaurant is finding great acceptance of their product or service offering, that owner may say 'm successful here. Let me find another market with the same demographics, 've got the financial stability to grow this business'
Other industries, of course, would look at different indicators to mandate growth and re-capitalization, such as product development success, approval from a government regulator, or landing a government contract.
As Wilson continues, planning for growth involves , from day-to-day operations, to marketing, hiring, market penetration and of the staff needed to grow the business.
2. Use and Adjust Your Business Plan to Guide Your Growth
A business plan is an essential aspect to both starting and growing a business. As Wilson explains: It starts with a foundational business plan that the entrepreneur used to get the business off the ground...and once you have been in operations for a period of time, you reassess that business plan with an eye to growing capitalization, staff, and market size. And Wilson suggests that any reassessment starts by asking five questions about your capital assets:
- How is the capitalization working?
- Where did the initial capital come from?
- What did it cost?
- How current are you in paying it back?
- Do you have the capacity to take on more capital?
You'll also want to assess the skill sets that you might lack in terms of running a larger organization.
As you fine-tune your business plan, you should also consider the audience for the plan. Any business plan needs to be geared to all the stakeholders in a business - from those who are providing the capital to outsourced agencies, as well as your management team. As Wilson explains: Any entity or person that has a stake in that business is an audience for the business plan. So your plan needs to be broad ranging, complete with every single aspect of the operation fully documented and strategized.
Last but not least, re-visit your plan (where you are versus where you want to be) on a quarterly basis.
3. Use Available Counseling Resources
As Wilson points out in the video, there are many online and in-person resources available to business owners to help them keep tabs on their business plan or to update it. For example, Business.gov's Small Business Planning Guide provides access to over 90 business plans, podcasts, videos and other business plan development tools.
In addition, nationwide chapters of the Small Business Development Center and SCORE provide experienced entrepreneur counseling to help them stay abreast of market changes and keep their business plan current. (Find your local chapter).
4. Get Help Financing Your Business Expansion
This topic is something we write about frequently at Business.gov and there are many options to help small business owners fund growth - from commercial bank loans to SBA-guaranteed loan programs.
Another increasingly popular option are private sources of capital, typically from outside investors looking for a private placement offering in their community or venture capitalists. This guide to Seed and Venture Capital Financing from Business.gov explains the process of sourcing private funding.
Don't forget, your local small business counseling resources can often help provide advice on which option is right for your business.
5. Understand the Difference Between and Ops Plan and a Strategic Business Plan
Strategic planning is essential to business growth. But what's the difference between a strategic business plan and an operational plan?
As Wilson explains: Strategy is really about answering the fundamental questions of why you're in business: What's our business? Who's our customer? Why are we special? Why are we better than our competition And continues: A strategic plan really places you in the marketplace. Whereas a day-today operational plan is all about laying the tactical foundation for how you are going to use your business resources to accomplish your strategy.
To view this Strategies for Growth - Preparing for Growth* video and 27 other videos in the SBA's Strategies for Growth series, including tips on planning and profitability, finding a mentor, and knowing how to channel resources, time and effort into the right growth strategies, visit the Business.gov You Tube Channel*.
* Note: Hyperlink directs reader to non-government Web site.
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General small business tips and tricks.