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The path to expanding your business is filled with opportunities and challenges. No matter your specific growth goals, meeting and overcoming these challenges requires careful planning. However, it’s important to remain nimble enough to take advantage of new opportunities that pop up. Consider these five points to help you pave a successful path to growth.
Having a clearly defined goal for growth can help you identify the steps you’ll need to get there. For example, if your goal is to double your sales over the next 12 months, your action plan might include launching a referral program to gain new prospects from existing customers. To manage your progress, you’ll want to assign target dates for smaller objectives leading up to your goal. Also consider potential pitfalls that may arise — for example, diminished quality from increased production, or strain on staff from increased workload — so that you’ll be prepared to mitigate these problems if they happen.
Does your success depend, in part, on other companies? Be sure they have the capacity to match your growth. For instance, can your current suppliers quickly turn around larger orders, or can your distributor accommodate an expanded distribution area? Remember, your growth should help your vendors boost their businesses as well. If they can’t meet your needs, then it’s time to find a partner who can.
Many small businesses use their cash on hand to fund an expansion, while other growing businesses need financing to help reach their goals. Financing can help you buy new equipment, find a larger space, or simply shore up your working capital. If you think you may need financing, the time to seek it is before you actually need it. Talk with your banker about your plans. Along with guiding you through financing options, they can suggest tools to help you effectively manage your cash as you grow. Remember, as your plans progress, your banker can be a valuable partner in your success.
Researching and understanding your market is critical to success when launching a new business. As you consider expanding, revisit and research your market through competitive analysis and customer studies. If you're adding a new product or service, understanding the target customer characteristics and competitive environment is especially important. If you're thinking about expanding to a new location or demographic, use market research to confirm that there are sufficient customers to support the business expansion. Most lenders will want to see your analysis when making a lending decision.
Growing your business may require hiring additional employees, which can entail considerable expense and an element of risk. Talk with your team first to understand where there are gaps and what skills are needed to fill them. Compare the cost of a new hire (i.e., compensation, additional equipment, training) with the revenue you expect to gain by adding the employee. If the expense outweighs the benefits, consider hiring a part-time or contract worker instead, or see if a technology upgrade could help to improve productivity.
Successfully expanding your business requires careful and well thought out planning. If you don’t have the current capacity to do the research and analysis, consider hiring a business analyst to help.
Growth requires change, which can be uncomfortable. Ensure you are effectively communicating with your staff and key stakeholders while moving your business to the next level.
Citizens Bank has the financing options to help you grow your business. Learn more about our simple, hassle-free business loans and lines of credit
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