Small business growth: The how’s and the when’s
“Expanding can only be done when a company is ready”. These simple yet wise words from Adolf Dassler, Founder of Puma, considers an important idea for entrepreneurs. That growing your business requires foresight and careful calculation. “Now” is not necessarily the best time to grow. In fact, trying to expand at the wrong time can be incredibly dangerous to your establishment. So, the big “Growth” question every entrepreneur needs to ask themselves is “how do I know when to push and when to wait?” In a way, you are like the parent asking, “Is my child ready for this next big step?” As a mom or dad, you know all too well that sending your child out into the big wide world too soon can have consequences. At times like theses it is wise to consider advice from the Grand Dads of the business world. Old school entrepreneurs who can help you ascertain how (and when) to put your baby’s expansion plan into action.
“Never test the depth of a river with both feet.” – Warren Buffet
Consider this scenario – you are a busy restaurateur and you are running out of space. Your current premises aren’t big enough and you are beginning to exceed capacity. Not having enough tables, rooms or product to service your customers is a clear sign that you have the potential to grow. If this is an ongoing issue (and not just a once-a-month occurrence) it may well be a good indicator to investigate how your business can branch out. But as Warren Buffet warns, do so strategically. Enquire about taking over an additional property next door and spend time negotiating a preferable rate with your landlord. If you need to move to another location entirely, make sure you have a plan in place to notify existing customers and market to the new neighborhood. Very importantly, don’t try reinventing the wheel. Your business was working for a reason so ensure that any expansion pushes the envelope but still retains your original formula. Remember that customers complain with their feet- they don’t say anything, they just don’t come back. So tread carefully and keep your customers in the loop along the way.
“Expanding capacity requires a willingness to ensure short-term discomfort in the service of long term reward” – Jim Lochr and Tony Shwartz, The Power of Full Engagement
There is usually one major difference between experienced entrepreneurs and those in a start-up. Experienced ones are more adept to letting go of an idea that isn’t working. The same applies to their approach to expansion. As a business owner you have to be ready and able to pivot when things aren’t working according to plan. This scenario is sure to rear its head when new factors are added to an existing operation. This can be one of the more difficult growing pains but making an educated shift up front, will be way better in the long term.
“What new technology does is create new opportunities to do a job that customers want done.” – Tim O’Rilley
Sometimes business growth is not about opening a new branch. Sometimes it is about upgrading existing components. Technology is an unavoidable consideration for small businesses in South Africa. Are there areas of your business that you could streamline with tech? In today’s digital-driven economy, a business cannot grow, scale, or compete without utilizing the kinds of technologies that fuel innovation. Technology-driven services can enhance every areas of your business from accounting to customer service to HR. If you are not using tech in your business, this could be a brilliant way to expand without changing your formula.
Growth is never by mere chance, it is the result of forces working together” James Cash Penny
As a small business owner, you are the one that ultimately knows what your business needs. Now you need someone who believes in your vision and who can help you finance them.
“Approaching the right lender for your business is essential to actualizing your growth potential; it is not necessary (nor advisable) to go it alone” advises Dov Girnun, CEO of small business finance leader, Merchant Capital. There is no need to jeopardize the existing financial health of your business in order to grow. Yes, business is all about risk, but make sure you have the funds to follow through with the project before making the jump. There are trusted Cash Advance providers out there who can help make things happen.
“Just because you’re successful building a small business doesn’t mean you’ll be successful building a big business.” –Robert Kiyosaki
It’s natural for small business owners to feel both internal and external pressures to expand. Most entrepreneurs want the biggest enterprise that they can grow and they want it as quickely as possible. While there is nothing wrong with expanding – knowing how and when to do it is everything when it comes to success. So approach your growth strategy with a good balance of ‘head and heart’. And remember William Hague’s wise words that ultimately, “There is only one growth strategy: working hard.”