The goal of virtually every business owner when they start their business is to see growth.
While the statistics of the success rates of new small businesses aren’t always favorable, many small businesses do succeed. In fact, some small businesses fail in their later years because the owners don’t know how to manage the growth and expansion of the business.
Here are five tips for managing the growth of your business.
Top 5 Tips For Expanding Your Business To Manage Growth
#1: Make Sure Your Growth is Sustainable
Small spurts of growth may happen for your business, such as during the holiday season or another time of the year when people are more likely to buy your products or request your services. You must understand if your business growth is seasonal, one-time only, or is actually on the path to expansion. The wrong assumptions can end up costing you a lot of money in the future.
#2: Prepare a Strategy and Define Your Objectives
It’s always a good idea to be prepared for what could happen, so you should make time to prepare for the growth of your business. This will allow you to understand the risks and opportunities you may face once you start growing. It’s just as important to define your growth objectives by asking these questions:
- Why am I growing/want my business to grow?
- Will I be able to finance my growth?
- Am I expanding too soon?
- Does my inventory match my growth?
- Is my production line efficient?
You should also make sure that your entire team has the competencies to handle the growth of your business— not just you.
#3: Control Costs and Debts
Expanding your business is going to require a lot of money, so one way to ensure you have the funds is to control whatever costs you can and eliminate whatever debts you can. The easiest way to begin controlling costs is to see where you can cut down on overhead expenses, such as your office supplies and equipment. You may also want to look into outsourcing certain functions— it may cost a lot upfront, but you’ll save more money in the long run, and it will be very helpful when you begin to expand. Examples of business functions that you can begin to outsource include:
- Customer Service
- Human Resources (HR)
- Information Technology (IT)
- Sales and Marketing
While investing in outsourcing partners, you must continue to control your debts so that lenders will see you as a viable borrower. This means that if outsourcing (or any other activity) will put you into or further into debt, you may need to hold off until your finances are in a better place.
#4: Consider Refinancing
You may need to refinance your loan(s) to reduce your monthly payments, and therefore free up some of your finances for other things such as outsourcing. Some lenders will provide you with business loans to refinance your debts if you’re undergoing rapid growth. This usually involves multiple debts being consolidated into one debt, within more manageable payment options. Refinancing gives you more financial flexibility, but you must be still making good business decisions.
#5: Upgrade Your Business Software
If you’re already using some type of business software, odds are that your software has some of the basic business functions: accounting, customer relationship management, project management, etc. However, once your business begins to expand, you’re going to need your software system to perform more advanced solutions to keep up with your business’s growth. Examples of the solutions include:
- Analytics- provides deeper insights into the performance of your business
- Demand planning- helps you plan for the future demand for your products/services, based on past data
- eCommerce- helps you launch and manage one or more eCommerce sites
- Global business management- allows you to manage all business locations (even if based in another country) in one location
NetSuite managed services from GSI give you all of these options and more when it comes to software solutions for your growing business. You’ll also get all of the basic business software solutions mentioned earlier. Automating your core business features, plus these extra features will help streamline your business.
All of these tips are helpful for all business owners to follow if finances allow for it. It’s good to implement these tips as soon as you begin seeing growth, but it’s even better to practice these long before you see growth. Many of these tips are just smart business practices, and others can even help contribute to the growth of your business.