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How Businesses Can Expand Smartly
Growing a business from its early stages to a multi-million enterprise that has still acres of room to expand is no easy task. There’s many occasions when entrepreneurs come unstuck trying to make the leap from a small team to a larger enterprise ready for a future stock market listing.
Let’s look at ways that a business can grow in a sensible manner.
Get a Small Business Loan
Raising additional working capital by applying for one of the small business loans that’s available to SMEs is a good strategy when you have a workable plan. It’s essential that any expansion ideas are well planned out not only to increase the likelihood of success, but also to avoid borrowing either too little or too much.
Having a project plan and a cash flow forecast worked out for what the expansion will cost and how the expenses break down is useful to present when applying for a loan. If the new business plan is markedly different to its current version, update it ready for inclusion with the loan application too. When lenders can see a carefully considered plan for the business using their funding, it’s easier to get their approval for the loan.
Make Strategic Alliances
Certainly, in the early stages of a business, it makes sense to seek out joint-venture partners where they have access to contacts, can structure effective deals, and reach an audience that your company hasn’t found yet. Your business still must have something of value to offer the partner in a particular project which can be a juicy percentage of the profits, access to new technology that your business has been developing or an introduction into markets you already have a foothold position in that they do not.
It’s sometimes difficult for a founder to swallow their pride and look for partners on a per project basis. They’re so used to working alone and calling the shots that having to consider someone else with each decision may feel like a drag. This is why there must be a clear upside to the partnership, so the motivation for maintaining the deal remains crystal clear.
Multi-Skilled Workforce
For SMEs, it’s important that the staff are trained to be multi-skilled. When one person is off work due to a sickness or vacation time, a colleague is already trained to step in and cover their position. Staff may initially be reluctant fearing that their job may be in jeopardy, but actually being able to cover other positions adds to their usefulness.
While the business will need to spend money on staff training or a lower productivity rate for a spell while the staff learn their colleague’s work role, in the medium to long-term the reduced disruption to the smooth running of the company is worth the effort.
Businesses that are to succeed as larger ones must be careful about what moves they make to get reach their target. Many companies have tried and failed to maintain their market presence while concurrently carrying out an expansion plan. Intelligence, forethought and grit are all required to succeed with any goal of sustained growth.
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