As a small business owner, managing growth can be a tough part of the job. Success is what you strive for, but it can also be stressful when you’re not set up for it.
While stretching yourself too far, too early, is a common small business mistake, so is waiting too long to take the next step and missing out on opportunities. It’s crucial for small business owners to recognise the right time to expand, but how can you tell?
You have the right people and are willing to ‘let go’
You want your team to be a well-oiled machine you can rely on to keep things moving, especially when the business is changing. It can be a challenge to let go of those day-to-day tasks, either out of habit or because you’re passionate, but it’s a requirement if you plan to expand.
Delegating doesn’t mean taking your foot off the pedal – on the contrary, it keeps your business moving and growing. If you have staff you trust and can share the workload with, this can free you up to focus on business strategy and what’s next. If you insist on doing everything yourself, you might find that you spread yourself too thin.
You’re saying ‘no’ when you want to say ‘yes’
If you’re regularly turning down new business because you don’t have enough support, stock, or supplies, it may be time to scale. Hiring an extra employee or even opening a second site could help you say ‘yes’ to more opportunities that you would have had to turn down before, and ultimately increase customers and revenue.
Unfortunately, research has shown that 1 in 3 small businesses report missing out on these opportunities because they can’t access funding when they need it. If you’re ready to expand but lack the initial capital to do so, there are alternative lenders that can provide business funding in less than 24 hours.
Make sure you have a holistic view of business performance that takes into account the seasonal peaks and troughs throughout the year. This can help you determine whether you just need short-term help, for example, extra staff over the busy holiday period, or need to expand your permanent team or premises to support long-term growth.
You have identified a new market and have a clear execution plan
As the saying goes, “a dream without a plan is just a wish.” Even if you’ve identified a profitable opportunity in a new market, you’ll want a clear plan to execute against and measure success. Setting SMART goals (specific, measurable, achievable, realistic and timely) keeps you accountable, which can be extra important for small business owners who are their own boss. Ideally, you will have already set and achieved previous business goals within budget, on-time or earlier than predicted.
Remember that you can’t take a copy and paste approach to new geographies or demographics. You should have a strong understanding of the new market, from its size, competitors and pricing, to customer behaviours and values. This will help you understand additional expansion costs such as marketing, which you can include in your business plan. Doing your homework early on will save you stress and unwanted surprises down the track.
Does the above sound familiar to you? If so, your business could be ready to take the next step.
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About the author
Anna Fitzgerald is the Group Head of Corporate Relations at Prospa. She focuses on media relations and driving our government, public policy and regulatory agenda. Prospa is Australia’s #1 online lender to small businesses. Prospa understands small business owners need faster finance solutions so that they can make timely decisions quickly and seize opportunities with confidence.