Any small business is likely to reach a point where it has the opportunity to expand and for many entrepreneurs that will be the reason why they started up in the first place.
But knowing when the time is right and how to go about expanding in a way that will not have a detrimental effect on the existing business is a delicate matter and one that should be subject of much consideration before you decide whether to go for growth.
“For a newly established business, taking that next step towards business growth can be challenging,” said Kim Fletcher of Business Link. “Research carried out last year by Business Link identified two of the most common pitfalls to growth as incomplete business plans and insufficient market research.
“As making mistakes can prove costly, it‘s important to plan growth and get the right advice. If you take the right approach, your business will reap the rewards,” he added.
Business Link offers the following tips to business owners considering expansion:
- Assess your business
This is a good way to see if your business is ready to grow. Consider current strengths and weaknesses and how well your business can deal with potential threats in order to develop the right strategy for growth - Do you have the finance?
For any growth strategy, a financial investment needs to be made. To make things easier, draw up a cashflow forecast which should allow for money to be put aside to keep your core business running. Build in some surplus too as it could take time to make a profit - Refresh your business plan
People think a business plan is only needed when you start up. In actual fact, it is important to go back and update it regularly as your business grows. By revising your business plan, you can write specific actions to put your new strategy into practice and achieve your business goals - Strengthen your team
A strong team is especially important if you want your business to grow. Getting the right mix of people to complement and develop your business is essential so bringing in a specialist on board to drive growth might be an option. Think about where you want your business to be next year or further down the line - Do your homework
Recognising a potential opportunity provides a good foundation for growth. Ensure you do market research into your customers and competitors. This will help you identify opportunities and prospects from within your market that you can respond to - Organic Growth
Growing your business organically, following its natural development path, can be done by either increasing market share or by diversifying into new markets. The option you choose should reflect the nature of your business, your resources, and available opportunities - Increasing market share Think about your customers, both existing and potential. Ask yourself what you can introduce to your business that will differentiate it from competitors. Remember to bear in mind you will need to invest in marketing to increase awareness of your business
- Diversification Think about looking at new markets or new products or something entirely different to your current business. This will require time and money so make sure you plan carefully
