Ready to Grow? 5 Ways to Assess Your Readiness and Plan for Expansion
by Caron_Beesley, Community Moderator
- Created: August 30, 2012, 7:02 am
Do you know where your company is headed? How do you know when it’s time to grow? How can you manage that growth so it doesn’t run away with you?
In this five-minute video – Strategies for Growth – SBA, in partnership with Dell, talked to Carey Wilson of the Maryland Small Business and Technology Development Center. He offers the following five valuable tips for preparing your small business for growth.
1. When is it time to grow your business?
You can only grow when business indicators show that you are ready for growth – and these vary by industry.
As Wilson observes: “If a retailer or restaurant is finding great acceptance of their product or service offering, that owner may say I'm successful here. Let me find another market with the same demographics; I've got the financial stability to grow this business.”
Other industries, of course, would look at different indicators to mandate growth and re-capitalization. For example, in the R&D sector, product development success or gaining approval from a government regulator would be indicators. For many small businesses, clinching a big sales deal can also be a signal for quick growth.
And how do you plan for that growth? As Wilson continues, planning for growth involves “a constant reassessment of all operational aspects of the business,” from day-to-day operations, to an expansion of marketing, market penetration, hiring and the staff skills needed to grow the business.
2. How can you guide your growth?
As with starting and managing your business, a business plan is essential for planning the steps needed to achieve your vision and exploit your business potential.
“It starts with a foundational business plan that the entrepreneur used to get the business off the ground...” explains Wilson. However, since things never go quite as planned, so it’s important to reassess things in a different light than you did in start-up mode. Wilson suggests revisiting your foundational business plan “with an eye to growing capitalization, staff and market size.”
- Ask yourself the following:
- 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?
- What skill sets do you lack or need in order to run a larger business?
As you fine-tune your business plan, you should consider the audience for the plan. Any business plan needs to address all the stakeholders in a business – from those who are providing the capital to outsourced agencies to 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 and complete, with every single aspect of the operation fully documented and strategized.”
Last but not least, revisit your plan on a quarterly basis to compare where you are versus where you want to be.
For more business planning tips read How a Simple Business Plan can Get you from A to Z, and Navigate all Things In-Between.
3. Think big picture
Strategic planning is essential to business growth. But what's the difference between a strategic business plan and an operational plan?
“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?” explains Wilson. “A strategic plan really places you in the marketplace.” A day-to-day operational plan, on the other hand, is all about laying out the tactics for using your business resources to accomplish your strategy.
4. Get help with your growth plan
As Wilson points out in the video, there are many online and in-person resources available to help business owners keep tabs on and update their business plan. For example, check out SBA’s business planning guide as well as these useful business planning video tutorials. SBA guest blogger and business planning expert Tim Berry, also contributes many blogs on this topic.
You can also get help in your community from various resources. For example, Small Business Development Centers, SCORE and Women’s Business Centers nationwide all provide advice and mentoring to help you with your business plan.
5. Finance your business expansion
We write about financing frequently at SBA.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, crowdfunding ventures and even borrowing from friends and family.
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