Growing your business can be financially rewarding and personally fulfilling. If you’ve founded and nurtured a thriving business, you might be considering the next steps in your business success story. Whether that’s opening a second branch of your bakery or taking on new team members at your design agency, you’ll need to ask yourself these key questions to lay the foundations of a successful growth strategy.
1. Are my current sales sustainable?
If your growth plans have been inspired by bumper sales, check what’s caused them.
If it is solid strategy and strong market demand, great. If it is a seasonal trend or fashion fad, be cautious. This might be a blip rather than a sign of sustainable growth.
Conduct research to understand the market you operate it. Is it growing or shrinking? A growing market offers more opportunities for growth than one that is contracting.
2. Am I financially prepared?
Your growing business will need firm financial foundations. You’re likely to incur upfront costs that will take time to deliver return-on-investment – additional wages, increased rent and overheads, more money invested in stock or assets.
You’ll need to find that money either from your reserves, from investors, or from a financing option. Each of these options carries its own risks and rewards, which you’ll need to evaluate. Read more on financing below.
3. Is my plan profitable?
It may take time for you to recoup the cost of growing your business. But this should always be your ultimate goal. Thorough market research should be the foundation of any growth strategy, to ensure that your product or service meets customers’ needs and that there is a strong ongoing demand.
You’ll need to think about your pricing strategy, especially when bringing new products to market, to maximise customer interest whilst still returning a profit. A strategic approach will reap the best rewards.
4. How can I finance business growth?
There are lots of different business finance options to help grow your business.
- Reinvest previous profits: so long as you have a safety buffer to cover any business contingencies, reinvesting your past profits is one way to fund business growth
- Take out a loan: high street lenders and specialist providers like Transmit Growth Loans can loan you the capital you need to invest in your business
- Negotiate with your current lender: if you have funding from an existing lender, approach them to discuss your future plans
- Find an investor: depending on your business, you may be able to find an angel investor or venture capitalist who is willing to invest in your business
- Look for grants: some grants exist for businesses that will create growth or employment in their community, or deliver solutions to pressing problems like climate change
5. What additional resources will I need to grow my business?
It isn’t just money that you’ll need to grow. Other resources you might need include:
- Staff: the people who'll join your team and share the increased workload
- Premises: you might need larger premises, a second site, or to graduate from your home office
- Transport: perhaps you’ll need a van for making deliveries, or transport for staff
- Equipment: from standard office equipment to specialist manufacturing equipment, don’t forget to factor this into your plans
6. What data can help me grow my business?
Business growth is based on understanding and meeting customers’ needs. So any internal data you have on your customers and existing sales can be a great starting point.
- What are your bestselling products?
- Where do you make the most sales?
- What have customers complimented or complained about in the past?
- What parts of your process is most frustrating or off-putting for customers?
- Which areas of your website or marketing strategy deliver the most sales?
This can all be helpful information to drive your growth planning. Check out our article on KPIs that show potential to grow your business.
In addition, external data about the size of your market, the state of the economy, and competitor activity will also help you plan.
7. How will business growth affect my current customers?
Make sure your growth plans include resources to continue your current business activities to the same high standard. Overstretching your capacity can lead to a reduction in quality, consistency or customer service.
Don’t let the time, energy and money you invest in developing your business come at the expense of the people who got you this far. Keep your existing customers happy.
8. Are my processes prepared for business growth?
Growing your business will usually mean bringing in more people or expanding to other locations. You’ll need to make sure your processes are effective and well-documented so that new staff can be trained and on-boarded quickly, without any detrimental impact on business operations.
Don’t forget you’ll also need to put new processes in place to ensure your bigger business still works just as smoothly, like improved internal communications, or H&S processes.
9. Can my team cope with business growth?
Have you got the right people in the right places to scale up your activity? New activity might mean new jobs need to be created or work reassigned. Do you have staff with the time, skills and motivation to help grow the business?
Conduct an audit of your current team skills and scope to take on additional responsibilities. Consider recruiting to highly specialist roles. Remember that change is challenging for staff, so communicate clearly and with care.
10. What will growth mean for me, and for my business?
This is an important question. If you’re used to working alone or in charge of a small team, growing your business can bring about a lot of changes.
If you’re used to working alone, taking on new staff can be a big adjustment, especially if it means moving to new premises and trusting someone new to deliver your services. You’ll have to get used to other people relying on you, paying them on time and managing their workload.
If you’re growing from employing a small team to a large one, you’ll have to think about your structure, middle managers, overheads. Do you want to be the managing director of the business? Or do you want to hire one so that you can play to your original strengths?
There’s a lot to think about. But if you’ve already started a business, you know the benefits of forward planning and thorough research. Invest the same time and strategic thinking to planning your business growth and you’ll be on firm footing for your next steps.
If you think you’re ready to grow your business, check out our growth loan calculator.