How to Prepare Your Small Business for Growth From Inventory to Employees
When you’re launching a new business, the goal is usually laser-focused on growing your customer base and making sales. Often planning for what is going to happen in the coming months and years is not of primary concern.
Even if you’ve created a business plan that delves somewhat into future plans, these are typically just rough estimates of what you think might happen down the road. Yet as you begin to get into the groove of your day-to-day business, it’s very easy to lose track of what you need to do keep propelling growth. Yes, there’s a lot to consider when you think of taking the leap from being a startup in its infancy to a maturing business.
What should you be looking at now to ensure growth is possible down the road? Here are some of the common considerations worth exploring when you have high hopes to take your business to the next level.
There are more solo entrepreneurs and micro-businesses now than ever before. Anyone with ambition and a great product or service can start selling on sites like Etsy or Elance. But not every business is cut out for being bigger than a one or two person operation. There’s a lot more that goes into growth than making more sales. These numbers have to be supported by modifications to operations, production, staffing, and location. In some cases, this is feasible but not always. If the business is built around a skill you have or a product you make, it may be difficult to scale your business up. Of course, this isn’t always the case, particularly if you can train others.
It’s important to ask yourself: What will your business will look like if it grows and profits increase? Could you juggle more customers and still have time for a life outside of your business? Do you want the added stress and responsibility if this happens?
Not every business’s growth trajectory is the same. For some, it might mean becoming a multi-million dollar global enterprise. For others, it could be as simple as ramping up sales enough to be able to leave a day job. Defining your interpretation of success is critical for preparing for growth, and there is no stock answer that is right for everyone.
If you sell products, inventory is a key consideration when preparing for growth. In fact, inventory management is one of the most challenging aspects of growing a business. Would you be able to get more of what you’re selling if there was greater demand? If you’re making handicrafts and already maxed out on what you can do, the answer may be no. However, if you have a supplier who will happily provide you with more inventory, your business might be well positioned for growth. This leads to the issue of cash.
Growing a business takes money. Cash on hand to buy inventory, hire help, and increase marketing efforts is often a necessity unless you’re independently wealthy. This is why it’s critical to do ongoing cash flow projections to be able to assess how much funding you may need before you start doling out more to support your business’s growth.
Bank loans are one option, but often traditional lenders are reluctant to provide financing unless there is substantial collateral, established business credit, and a detailed business plan.
Another option is Kabbage, which provides advances specifically for small businesses in growth mode. By providing a quick source of cash that is available in just minutes, small business owners gain the flexibility to be able to purchase what they need when they need it. This is an incredible advantage for a business focused on growth.
What works quite fine when you have a few customers can become incredibly slow and inefficient when the business begins to grow. Everything from credit card processing devices and printers to packaging machinery and delivery trucks may need to be evaluated before you hit the next step in your business’s growth. Not having adequate equipment can have a substantial impact on your bottom line.
Maybe you’ve been using that neighborhood printer to create brochures and packaging for you. While it’s great to support a local business, if they cannot support your growth, it might be time to move on to a vendor who handles larger accounts. Almost every business in growth mode hits the point of having to change vendors. It is well worth your time and effort to sit down with them and ask if they can support your growth. If they can, then you might be able to grow together. If not, it’s fair to move on.
Having the right people in place is a necessity to sustain growth. And these people should be who you believe will help you run your business when you’ve reached the next level. In other words, hire employees who you feel confident can be successful in the size company you are striving to achieve. They’ll be your support team as you journey to get there.
Many small businesses start in garages or on kitchen tables. But most cannot be sustained in these makeshift spaces. When you consider your goals, envision where you can make these happen and how much that will cost you on a monthly basis. Having the right place to grow your business can be pivotal to not only giving you enough space to grow but also to how your customers view your business.
Increased marketing is usually the driver of more business. Do you have competitors who have more market share than you? Find out where they advertise and how they manage their online marketing efforts. They might be worth emulating, or you might gain some valuable insight into what you can do even better.
Every entrepreneur should consider what they envision for the last chapter of their business. Perhaps you would like to pass it on to your children. Or maybe you have high hopes of it being bought by a larger competitor. Defining how you want to “close up shop” is very important to your growth strategy and can dictate a lot of the decisions you make along the way.
Are You Ready to Grow?
It can be incredibly exciting to consider the possibilities of where your business can go and how much it can grow. In fact, this excitement is often exactly what propels individuals to become business owners in the first place. With unlimited possibilities, entrepreneurship is undoubtedly an amazing experience that can deliver a tremendous sense of pride and satisfaction whether you’re happy with remaining a solo entrepreneur or decide to reach for the stars when it comes to growth.