As the economy continues on track toward recovery, many businesses are putting their contingency plans aside and discussing growth opportunities. However, in any economic climate, it's essential to weigh the pros and cons of expansion and proceed with caution. While some say "grow or die," making poor business decisions can bury your business completely.
When considering growth, first do some personal reflection to determine not simply, "is my business ready," but "am I ready?" Taking big steps to develop your business is going to put a great deal of stress on your personal life. Be sure you're ready to handle it before putting any plans into action.
Next, pinpoint exactly what growth means when it pertains to your business. Do you plan to:
- Increase your current market share?
- Create a new product or service line?
- Expand into new markets?
- Acquire or merge with another business?
Assure you conduct sufficient market research to determine which of these areas would be most profitable for your business. Take into account your competitors, your customers' needs, and the niche you already hold in the market.
Once you personalize the definition of growth for your business, make an objective analysis of your business. Consider the resources you're already equipped with and decide whether or not these assets have the ability to support your growing business.
Even if your product is up to par, a soggy foundation can leave you sunk. Consider the stability of these resources:
- Financial: Is your business checking account healthy enough to handle the financial stress of business development? You'll likely need additional funds to invest in your growth, which means you must assess the likelihood that you can secure more funding for your new business venture.
- Staffing: Are your current employees up to the challenge? If not, be sure you have the capabilities to provide sufficient training or the financial means to hire a new top-notch team. Remember that your growth will be fueled by dedication of your employees — expect to compensate them as they reach new levels of responsibility.
- Technology: Do you have the additional or upgraded equipment necessary to create a new product or to increase production of an already successful one?
- Location: Do you have the ability to house the staff and equipment that will be required to sustain growth?
- Marketing: Do you have the tools on-hand that are necessary to assure your customers are aware of your new or improved products or services?
When considering these aspects, decide just how much you're willing to invest to assure your resources can provide a satisfactory foundation for the new workload. If you decided the benefits outweigh the risks and you're equipped to meet the challenge, it's time to put it in writing.
You probably created a business plan when you first started-up, but reexamine it and you might find that you've veered from the path you mapped originally. Be sure that you keep your business plan up-to-date especially when you're making changes to encourage growth. This document will not only come in handy when seeking funding, but will serve as a time line by which you can measure your success. Having this clear-cut plan will also help you stay focused on your business rather than getting distracted by opportunities outside your niche.
Finally, do the research to assure your customers are going to be on board with the changes. It's not smart to make alterations to your product that might seriously disrupt brand loyalty. For example, when Coca-Cola changed their recipe in 1985, their loyal customers demanded they bring back the original recipe. The soft-drink giant spent millions on this growth endeavor only to revert back to where they started.
Growth can be very profitable, but also extremely risky. Instead of diving in head-first, make a plan and take precautions to assure you have the right skills, resources, staff and customer attitude to be successful.
Labels: Business Tips