The Ultimate Guide to Growing Your Business
We know that starting a business can be daunting. A business is typically born out of being the entrepreneur’s passion and no one wants to see that fail. And while starting a business is always risky, a solid foundation will alleviate those risks.
First and foremost, a business owner needs to be consistent. Businesses require constant care and attention, and as William S. Burroughs said, “when you stop growing, you start dying”. So, let’s focus on how to effectively manage your business and achieve sustainable growth. Here’s your guide to growing your business.
In this article we will cover typical problems and solutions to the three business stages, introduce you to the business development plan, and provide some tips on how to nail it.
Stage 1: Start-up
The start-up business stage is an exciting time for any entrepreneur. It can also be the most time consuming and challenging – putting out fires that you didn’t even know you could have, working out what’s best for your business, and determining your business plan.
The problem: Not getting the customers
Even if your product or service is great, sometimes the customers take a while to come through the door. First of all, your target audience needs to know who you are and how to get in touch with you. If your website is slow to load, not optimised for receiving leads, isn’t user friendly, or is unclear, then there’s a high chance of customers looking at the competition.
At the very least, you need a website that is inviting leads, whether that’s contact information or downloads. And it has to be user friendly – when 1 out of 2 customers are abandoning a website that takes over 6 seconds to load, there’s no room for poor user experience. It also needs to be optimised for mobiles as well as desktop – 46% of all web traffic comes from mobile. Of course, marketing goes a lot further than this, but a social media presence, a newsletter, and a slick website is non-negotiable.
The problem: Cash flow issues
Business owners tend to fund their venture by haemorrhaging their savings, taking out loans, or seeking investment. Over 29% of start-ups fail after running out of money, so the importance of budgeting can’t be emphasised enough.
Budgeting doesn’t come naturally to everyone. However, it’s imperative to spend wisely and carefully with a start-up. Track your expenses and keep money aside for unexpected costs. Although money might be tight at this stage, working with a business accountant can save you money in the long run.
The problem: Biting off more than you can chew
As we’ve said, entrepreneurs get protective of their business. They want to be able to do everything themselves, sometimes not trusting someone else to treat the business with as much care as they would. But one person can only do so much and being too proud to seek help will destroy your business.
Every good business owner should know their strengths, weaknesses, and limits. Throw the mantra ‘if you want something doing right, do it yourself’ out of the window. Not only will the business suffer, but so will your mental state. Learning how and when to delegate is key for growing a business. Yes, there might be mistakes, but that’s the only way to learn and grow. If you’re tight on cash and can’t afford to hire somebody full time, consider working with a freelancer whose an expert in the field.
Stage 2: Scale-up
It’s during this stage that you’ll start to see exciting and promising growth. The business will see an increase in revenue, customer base, higher profit margins, investor funding, and so on. But it’s important to be prepared for that growth – growth can be volatile, it needs to be carefully managed.
The problem: An increase in workload
As the business grows, the workload will naturally increase. Staff members can get stressed with the new demands, reducing their happiness at work.
Regularly evaluate your business’ processes and test new ways of doing things, including investing in technology. You’d be hard pressed to find a technology vendor that doesn’t offer a free demo- take them up on it, even if you don’t end up using it. Putting the time in to alleviate unfair demands on your staff is worth it. And if a process can’t be automated, consider expanding your workforce.
The problem: Growing workforce
While expanding your workforce solves one problem, it causes others. Payroll becomes increasingly complex and meeting the specifics needs of a larger, more diverse workforce can be difficult.
These are common business problems. You won’t be first to go through them, and certainly not the last. Luckily, those who have gone before you have figured out that a payroll software and HR management systems are vital in administration and for engaging employees.
The problem: Supply chain issues
A healthy supply chain is the lifeblood of a company’s day-to-day operations. If this isn’t managed properly, it can lead to unsteady and volatile growth, and eventually a decline in revenue. Customer demands won’t be met, and you’ll struggle to take on more business. Consistent, steady growth is the key to maintaining a healthy business.
For starters, it’s crucial to constantly be looking ahead towards long-term sales forecasts and preparing for how those projections will affect your supply chain. It’s beneficial to work with a business accountant on this to positively predict sales and control inventory. It’s also a good idea to maintain a relationship with a diverse network of suppliers, to make sure you always have a backup.
The problem: Maintaining your company culture
Amidst all the excitement of business growth, it can be easy to forget that a company’s culture is just as important as the bottom line. Your employees are what got you to the scale-up stage, and with only 10% of companies making it, it’s worth celebrating once in a while.
It’s so important to celebrate wins, whether that’s big or small. A work social or even a nice, personal email go a long way to solidifying a supportive, healthy company culture. It’s also important to take every opportunity to engage with your workforce. Gauge their views on how they think the company is doing, what the company could be doing better, if they feel supported.
Stage 3: Expansion
After an exciting bout of growth, businesses need to avoid stagnating. Many turn to expansion as solution, whether that’s entering a new territory, introducing a new product, or a new market altogether.
The problem: Breaking the US market
Eventually, conversations turn to entering the US market. It happens time and time again. And it’s not hard to see why – it’s the largest consumer base in the world, the strong relationship between the US and the UK, and the reward can be massive. But the risk is huge, and not everyone makes it.
In such a competitive market, many entrepreneurs find themselves going back to square one and not everyone is comfortable with it. With 10, 15, even 20 years under your belt in the UK, European, and maybe Asian market, there’s something unsettling about starting all over again. But it’s necessary. Finding your product market fit, pumping tonnes of money into marketing, and hiring a local team are just some of the steps you need to take. You can find out more about entering the US market here.
The problem: Introducing new products
In the expansion phase, it’s only natural to want to expand your products and/or services. If you’ve nailed it once, you can nail it again. But it reintroduces the problems you had in the start-up phase – funding, marketing, managing quality, and supply chain.
Firstly, you need to ensure that you have a solid product that fits the market. Avoid targeting high risk, highly saturated markets. The quality has to be top-notch, because it’s now your established reputation that’s on the line. Then, it’s a good idea to secure a round of funding to support your expansion phase. And in terms of generating interest, your customer base is key – let them know a new product is coming, offer one-time promotions to subscribers or existing customers, and get feedback from those customers.
The problem: Managing business performance
The expansion process is delicate. Expand too quickly, and your business could tear apart at the seams. It can also be all encompassing for employees, tearing their attention away from day-to-day duties and customer service can take a hit.
Plan and prepare for the expansion process before its even hit that stage. Devise strategies and test them out before implementing. Set realistic growth objectives considering the capital, workforce, and hours that’ll take you to where you want to go. It also might be time to hire more employees. If your existing employees have found their responsibilities changing, this is a good thing, but it’s important that they don’t feel overburdened and can focus solely on the expansion.
Creating a business development plan
Why is it important?
A business development plan is similar to the original business plan, but it focuses more on growing the business. It becomes a clear framework for strategy, putting concrete steps in place to take the business to the next level. Each business stage is meticulously analysed – devising SMART objectives, strategically planning, forecasting, and coming up with solutions to potential problems are the main goals of a business development plan. It helps you know that your business is on the right path, and all of the goals you’ve set in place can be achieved.
What are the key points to consider?
Your customer base: Identifying your target audience and really understanding your customer base is a vital part of a business development plan. If you don’t understand who your customers are, how can you target them in a meaningful and purposeful way?
Your marketing strategy: Every business needs a clear and effective marketing strategy. While some business owners disregard the importance of a marketing plan, they are the roadmap to a company’s growth.
Your opportunities for growth: In the research phase before putting the business development plan in place, it’s important to thoroughly study your competitors, the price of products you’re working on, the behaviours of your targeted market, and so on. Then, you can use this data to find loopholes in the market and use them to your advantage. This provides a huge opportunity for growth – adding products, services, and new approaches to make your company the best one.
A SWOT analysis: A SWOT analysis is a simple but useful framework, analysing the strengths, weaknesses, opportunities, and threats of a company. Analysing the company’s strengths and weaknesses encourage you to look internally, while opportunities and threats are external.
Your hiring needs: Determining your hiring needs isn’t just deciding how many more people you are going to hire. It’s analysing what skills you need to hire, whether you need full-time employees, if hiring a freelancer is a better option, what their duties will be, and how they’re going to fit into the business plan.
Your financial plan: Planning your funding is a crucial part of a business development plan. Generally, it can include an Income statement, Statement of Retained Earnings, balance sheet, and cash flow statement. When you’re presented with the financial condition of the company, you can make smart decisions that’ll be beneficial for the company.
Setting realistic objectives: Finally, use all the research and planning that you’ve already done to set realistic goals and objectives. None of the good work you’ve put into the business development plan will work if you don’t have objectives to work towards. If they’re not defined or not realistic, then you’re going to struggle to maintain it or benefit from it. Try the SMART approach – Specific, Measurable, Achievable, Realistic, and Time-bound.
Tips for creating your business development plan
- If you’re selling a product or service that’s been around for a while, have a look at old marketing materials to see what kind of language was used to attract those customers
- Set both long-term and short-term goals
- Identifying growth opportunities isn’t the hard bit – ensure that you select the ones that are aligned with your business and make sense for your goals
- Be honest and realistic about how much cash flow you’re going to need to grow your business – don’t underestimate it to try and be more attractive to investors, they want to see the real figures
As a business owner, you will find so much value in having an accounting advisor in your corner. We know that running a growing business involves a lot of juggling, but your accounting doesn’t have to be one of them. From day-to-day accounting to getting you ready for Venture Capital investment, we have you covered. For an informal chat about how we can help you, get in touch today.