Making the decision and commitment to give your business a big push to enter high growth phase involves analysing where your business is now and how you will cope with the increase in demand. Knowing when your business is ready to handle growth can be tricky but we've come up with some steps to help you figure it out!
Use the six-step growth analysis plan
Even if you didn't plan to grow your business, it's never too late to start – but where do you begin? You should definitely begin with spending time seriously evaluating where you are, where you want to go, whether you can afford it, and how you are going to do it. So here are the 6 steps to plan for growth:
1. Evaluate where you are now
Your business can’t grow without your willingness to do something about it. It is important to evaluate where you are now and where you are going. Having an understanding of what makes the business profitable and where it sits against competitors is also vital when deciding if it’s ready for growth. Talk to us today about how we can help you evaluate your businesses current position.
2. Decide whether you want to and are ready to grow
In most cases, growth doesn’t just happen – you have to make your business grow at a pace that you can physically, mentally and financially manage. One thing to think about when deciding whether you are ready to grow are the skills needed to achieve growth. You should have solid financial, marketing, sales, communication, technical, and administrative knowledge. If you haven’t, you either have to learn these skills or delegate them.
In the case that you need to hire employees to fulfill some of these tasks, are you ready to take on the responsibility of hiring and training employees? Do you have enough cash flow to ensure wages are paid on time?
It’s also probably a good idea to take a look at relocation and finance matters now too. Would growing your business mean relocating to larger premises? If so, can your business afford this? Is your business stable enough that you could apply for a loan? How will you generate income? Is your business paying you a satisfactory wage? Study your most recent financial statements. What are they telling you? Sit down with us and spend some time finding out.
Don’t forget to consider the non monetary costs of growing your business such as time and energy. These are the two most important ingredients in the success recipe, so ask yourself: Am I still enthusiastic and energised about the business? Am I feeling overworked, depressed, tired and a little burned out? Do I have the time to seriously commit to growing my business?
3. Set goals
This step is often missed on start-up. There is no doubt about it – if you set goals with deadlines and stay focused, you WILL reach them. Start thinking about different types of goals you wish to achieve and break them up into four distinct areas:
- Personal goals
- Business goals
- Material goals
- Family goals
4. Plan how you will grow
This part of your growth plan may take time to develop. This step involves looking at the bigger picture. You need to understand what market you will be doing business in and how you will position your business in that market. Take a look at your direct competitors and their offerings and compare them with your businesses strengths and weaknesses. Determine how to overcome weaknesses and think about what marketing methods you will use. And don’t forget to set a projected time frame!
5. Plan how to finance your growth
When you have planned how you will grow, you should have identified where additional funding is needed to meet your needs. Research these costs and incorporate them into your projections.
It is also wise to research loan programs and make sure you understand what banks offer. If you need financial advice for your business, give us a call today and find out how we can help you.
6. Compare progress to projections
Once you have a viable growth plan in place with the funds to accompany it, review your financial figures and projections each month. If you borrowed money, it’s even more important to see if the investment is reaping the expected returns.
Consult your plan then update financial figures and projections before making any financial decisions. Remember to regularly monitor your progress in order to readily identify concerns and remedy the situation.
The best method of reviewing your progress is to compare actual results to projections. Study each area of your analysis to determine why the figures vary, and then decide how to resolve any problems. If you are unsure of anything, let us help you analyse your spreadsheets so you can make superior business decisions.