Expansion, business growth
3 April, 2018, 12:00 am
DURING this series I am looking at a number of issues relevant to all SMEs and identify both the opportunities and challenges associated with each issue.
Topics to be covered include planning; staff and recruitment; customers and service; marketing; competition; new products and services; being well organised; collaborating with others; understanding and analysing risk; managing the money; going into business with family or friends; grants, loans and investment; expansion and growth; technology and exporting.
Today my focus is on expansion and growth.
Knowing when to grow our businesses is a major challenge for all small business owners. Most of us want to grow so we can increase our profits, employ more people and gain more customers. The challenge we face is to plan our growth and expansion well and make the right non-emotional choices at the right time.
If we use planning as a good business development tool, then planning the right steps to expand will not be difficult-they will follow on quite naturally. Expansion and growth must be driven by the business need- is there a good business case to get bigger? Will growth make more money or just cost us more? We need to have a clear reason for growing. Sometimes we can increase profits by just becoming smarter in the way we run what we already have. We need to be clear what is driving our desire to grow.
If you are considering growth or expansion, follow these steps before making a final decision:
Re-do your SWOT- strengths, weaknesses, opportunities, threats-and use that to help analyse your readiness to grow.
Think about what is going on around you-what is happening in your local business or political environment that could help or hinder growth?
What do you enjoy most about your business at the moment-how will growth affect that?
What do you find most challenging and how will growth impact on that?
Revisit your goals for the next five years-how is growth and expansion going to help you achieve them?
What will growth mean practically in terms of buildings, equipment, staff, products and services, technology, skills and experiences?
Review your financials- talk with your accountant if you have one.
Seek feedback from staff, customers and others like suppliers.
Can you afford it or will you need to borrow? If you do, can you afford to be in debt?
Consider all these questions, share your responses with a mentor or someone you trust, and then ask yourself if now is the right time to grow. Do you have clear evidence for growth or just some ill-conceived whim?
It is very easy to over extend ourselves, to take on too big a building or too much debt or too many staff. Sometime a growth is best in small steps-one step at a time so you have less to lose if things do not work out.
I am not anti-growth but I am anti unplanned growth- I have seen too many really good small businesses become mediocre larger businesses. Owners who have lost their passion and spark. Family businesses that have lost that family support and closeness. Owners who have to work longer hours just to keep paying the ever-increasing bills.
The key to running a good business is to enjoy what you are doing-grow and continue to have fun is likely to be a great recipe for success. If growth becomes a burden, then that is likely to be a recipe for failure.
If you need help with your own growth and expansion plans or you want some feedback on your own practices, then please get in touch.
* Chris Elphick is Partner in Breadfruit Consulting, formerly Learnfast Pacific, supporting the development of a range of businesses and organisations in Melanesia and other parts of the Pacific. He is an experienced trainer, coach and business mentor and has years of experience of working with Small & Medium Enterprises. He and his partner Hazel Kirkham live in Vanuatu.
Breadfruit Consulting have partnered with Fiji Entrepreneur to develop mentoring services for new and young entrepreneurs. If you have an issue or query related to this article, please contact Chris at email@example.com or text to +6785500556