It’s one of the most contentious words in the business world, but get it right, and growth can be the buzzword that transforms your company into the glitzy heights of huge profits.
Of course, get it wrong, and the horror stories are there for all to see. While growth should be applauded, it’s a tricky terrain that can prompt countless fatal mistakes.
As the old saying goes, fail to plan, plan to fail. Bearing this in mind, let’s look at some ways you can plan ahead for your future growth.
How are you financing your growth?
There are several ways to finance your growth, but choosing the right option for your business is essential.
Debt financing, which can be in the form of loans or lines of credit, is a popular option for businesses looking to grow. However, it’s important to remember that this type of financing needs to be repaid, with interest, so it’s not without its risks. You also need to ensure that your credit scores are in tip-top shape and you’re a favourable customer for lenders.
Equity financing is another popular option and involves selling a stake in your business in exchange for funding. This can be an attractive option for businesses that don’t want to take on debt, but it’s important to remember that you will be giving up a portion of ownership and control of your business.
Or, you may have built up enough profits to take things on without borrowing. While this might be the safest option, it’s not always the most efficient. After all, there are ways to use “good debt” to your advantage, so scrutinise your options carefully before progressing.
How are you going to manage your growth?
Growth can be an exciting time for businesses, but it can also be stressful. It’s important to have systems and processes to manage your growth effectively, or you could find yourself quickly overwhelmed.
Consider your customer service needs, for example. As your business grows, you’ll need to ensure that your customer service can cope with the increase in demand. This might mean hiring more staff or investing in customer service software.
You’ll also need to consider your supply chain and how you will ensure that your products or services are delivered on time and to the correct specification. This might mean working with new suppliers or increasing your stock levels.
This is where a poor growth plan can become unstuck. Yes, there might be potential, but you can also undo years of hard work if you don’t manage it properly.
What are the risks associated with your growth plan?
All businesses come with risks, but it’s important to identify the risks associated with your growth plan and implement measures to mitigate them.
For example, if you’re planning on expanding into new markets, what risks are associated with this? Are you aware of the cultural differences? Do you have a solid understanding of the legal landscape? Are you prepared for the potential language barriers?
What are the risks if you’re planning on launching a new product or service? Have you done your market research? Do you have a solid understanding of your target market? Are you prepared for the potential of your product or service not being well-received?
These are just some of the questions you need to ask yourself when assessing the risks associated with your growth plan.