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5 Key Success Factors for Expanding Your Business

If you’re a small business owner looking to take steps to grow your company, you’re not alone. According to 2015 ADP data, businesses with 50 or fewer employees added 1.6 times as many jobs during the last month of 2015 than did those with 1,000 or more employees.

 

Growing a business comes with challenges as well as opportunities. No matter your specific growth goals, meeting these challenges requires careful planning. Consider these five points to help you pave a successful path.

1. Clarify your goal

Having a clearly defined goal for growth can help you identify the steps you’ll need to take to achieve it. 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, or expanding the number of businesses that carry your product. Assign target dates (when possible) to the smaller objectives leading to your goal. Consider potential pitfalls that may arise — for example, diminished quality when increasing production, or strain on staff from increased workload — so that you can plan to avoid them.

2. Reassess your vendors and partners

If your success depends in part on other companies, be sure that they have the capacity needed to help you grow. For instance, you may need to know whether your suppliers can quickly turn around larger orders, or if your distributor can accommodate an expanded distribution area. Your vendors may be more flexible than you would imagine, especially since your growth can help boost their businesses. So long as you have a good track record of payment, for example, they may be willing to extend better payment terms or increase your credit to help you manage your growth.

3. Strengthen relationships with lenders

Many growing businesses need financing to help them reach their goals, perhaps through buying new equipment, finding a larger space, or simply shoring up their 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, he or she could suggest tools to help you manage cash effectively as you grow. As your plans progress, your banker can be a valuable partner in your success.

4. Look to technology to boost efficiency

Choosing the right technology can help you streamline key processes and potentially profit more from growth. A 2015 Google survey found that more than 80 percent of fast-growing businesses see technology more vital to their success, a significantly higher share than no-growth firms. Depending on your type of business, certain software programs or applications can help to simplify or improve a number of key functions, such as inventory management, fleet tracking, and communication with customers and vendors. In addition, using online banking and remote deposit services can speed up money management tasks. This can help you refocus staff on other important areas.

5. Make informed hiring decisions

Growing your business may lead you to consider adding employees. This entails considerable expense, as well as an element of risk. Talk with your team to be sure you understand the gaps you will need to fill and the skills 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 it seems the expense will outweigh the benefits, consider whether hiring a part-time or contract worker may be a good first step, or if upgrading your technology could help to improve productivity.

More information

We are committed to helping your business succeed. Our dedicated business banking professionals can help you find the right product to meet your business’ needs. To learn more, please call 1-800-428-7463, visit us online, or visit your nearest Citizens Bank Branch.

 

Disclaimer: Views expressed may not necessarily reflect those of Citizens Bank. The information contained herein is for informational purposes only as a service to the public, and is not legal advice or a substitute for legal counsel, nor does it constitute advertising or a solicitation. You should do your own research and/or contact your own legal or tax advisor for assistance with questions you may have on the information contained herein.