Growth is good – or so most small business owners believe. While there is no question that well managed growth is the lifeblood of business, uncontrolled growth can be its death knell.
We love our clients with big ideas and ambitions! But if you are looking to grow exponentially, tackle new markets or take on new products then you need to make sure you are ready BEFORE you take the plunge. We’ve seen too many businesses sink because they weren’t financially or procedurally prepared for a sudden upsurge in sales.
Go through MJ’s Ready to Grow Checklist carefully and reassure yourself that you are ready to grow before you put your foot on the accelerator pedal.
Do you personally have the time and energy to handle growth?
The first item on the checklist is you. No doubt you are already feeling some degree of stress and fatigue. Will you be able to manage with increased pressures as you grow? Will your family support you increasing your commitment to the business? What procedures or additional staff might you need to put in place to avoid burn out?
Is your business currently in a strong cash flow position?
Growth puts enormous strain on your cash flows. Is your current cash flow position strong? Do you have strong procedures in place for collecting debt? Do you have good relationships with your suppliers and might they be willing to support you as you grow?
Is your current customer base solid?
When you focus on growth, chances are you will take your eyes off your existing customers. Are you confident that your relationship with those customers can stand a period of lower attention? What can you do to keep your finger on the pulse of your current customer base while you are growing? What do you need to put in place to ensure you don’t lose your current customers?
Do you currently have solid policies and procedures in place?
It is inevitable that as you grow the pressure will build on you and your staff. If you don’t have solid procedures in place mistakes will happen that may threaten your customer relationships. Have you thought through your procedures and written them down? Have you ensured that all staff members are trained in these procedures?
Do you have the necessary skills on board?
Do you and/or your staff have the skills to handle the financial, marketing, sales and administrative functions that will be required as the company grows? If some skills need to be learned, can you still grow the business while you learn? Do you need to bring in additional expertise and if so is the talent available and at what cost? Will you have to bring in the skills before you grow? If so, can you afford the short term drain on your resources?
Do you have the right premises?
Can you grow where you are or will you need to move premises? If you are currently working from home are you comfortable with taking on a commercial lease? If you need to move, what legal and lease cancellation fees will you incur? Can you afford the increased overheads?
Is your business stable enough that you could apply for and repay a loan?
Growth costs money. We have already highlighted that growth will strain your cash flows and increase your overheads. Is your business in a position to borrow money if you need it? Do you have a good relationship with your bank manager? Have you shared your plans for growth with your bank (even if you aren’t currently planning to take a loan)?
How did you go? Are you ready to grow….or do you have a bit of homework to do?
If you discovered that you are not quite ready or you aren’t sure about the answers to some of these questions, give us a call. We would be happy to help get you ready for growth.
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