- Have a plan – creating a business plan for growth and reviewing it regularly can help you to spot any issues across areas such as cash flow, capital requirements, staffing or supply chain. Forecasting and then checking actual figures against your projections mean you can respond early and take action that could keep sustainable growth on track.
- Understand your business’ sustainable growth rate – the maximum amount of sales growth you can reach without compromising your cash flow or requiring additional finance. Aligning your growth strategy with your growth capacity can identify any areas of financial or operational overreach.
- Do your research – if you’re entering new markets, launching new products or targeting new customers, make sure you analyse available data and thoroughly research long-term growth potential, payment terms and upfront costs.
- Create robust, scalable processes and systems – investing in processes and systems that can be scaled or automated as your business grows can lead to efficiencies later on. Accounting, cash collection and time-management processes in particular need to be rigorous.
- Re-appraise your finances – the financial needs of a steady business are different from those of a growing one. Taking a look at how your finances are structured can be an eye-opener. If you’re regularly exceeding your overdraft limit, perhaps a loan could offer better terms? Seasonal businesses may require more flexibility from their finances, and businesses looking to purchase plant, machinery, office equipment or company vehicles may find that leasing, hire purchase or other forms of asset finance could prove more cost-effective than outright purchase.
- Remember that ‘cash is king’ – make cash flow a priority. Keep a cash flow forecast and monitor performance rigorously. If you’re struggling to collect what’s owing – whether that’s due to recalcitrant customers or lack of admin time – invoice discounting or factoring may be solutions worth considering.
- An eye for profit – if sales are growing but profits falling, re-considering your pricing strategy may be appropriate, particularly if you heavily-discounted to corner market share. Working in a profit percentage for each sale, for example, can ensure margins aren’t eroded.
- People – hiring, training and developing the right people can make a big difference to the success of your growth plans. Spending time thinking about and documenting your organisation’s culture and core values gives you a benchmark to assess how potential employees will fit in. Working with a trusted recruitment partner, who understands your business and its culture can also save you time and money.
- Manage your supply chain – make sure you take suppliers with you on your growth journey. Communicate your plans to your suppliers to check they can meet increased demand or consider diversifying to bring additional suppliers on board.
- Collaboration – you don’t have to go it alone. Whether it’s outsourcing non-core activities, formalising partnerships or joining forces to achieve economies of scale, collaboration can help you grow into new markets or secure new customers by acquiring skills, experience or more practical assistance like access to distribution networks or specialist machinery.
Supporting businesses to secure sustainable growth is in everyone’s interests, so asking for help from your bank, accountant or your local business network can provide a real boost and a fresh perspective on your plans and any issues you’re facing.
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