The Right Ways to Grow Your Business

First the good news: your clients love you and you have the revenue to prove it! But now what? Should you get bigger while momentum is on your side? Or should you hold steady, minimize risk and stay the course? Here are three rules for pacing growth and protecting what you’ve built so far.

Rule #1: Don’t presume faster is better

While one school of thought suggests it’s best to strike while the iron is hot — open another fitness studio because your first one is pretty busy or start roasting coffee since your artisan chocolates sell so well — there can be reasons to wait.

Growing too fast, even if you qualify for low-interest loans or a sweet commercial rental deal, has its risks. These include:

• Stretching yourself too thin: If you’re still getting established — let’s use that fitness studio as an example — you’re already working long, hard hours. Is now the time to double down with a second location… and staff and payroll?

• Outgrowing your space: Let’s say you rented a professional kitchen for your chocolate production. Are you ready to break your lease or rent an additional space for the coffee roaster and staff?

• Cash-flow issues: Whether it’s renting more space; buying more inventory, equipment and materials; or hiring additional staff, rapid expansion comes with an additional wave of expenses. While growth usually benefits from some economy of scale over the long-run, initially, it’ll cost you. Ask yourself if you’re ready to take on more debt to fund that next stage, now.

While rapid, sky’s-the-limit growth may not be right for your small-business, slower paced organic growth in the form of finding new customers is always a safe bet. Have you tried promoting your artisan chocolates via subscription boxes or social media marketing? Could you introduce an outdoor running club to your fitness studio schedule? Think of lower risk ways to boost revenue first.

Rule #2: But don’t miss the boat, either!

Growing too slowly has its downsides, too. Taking too cautious an approach can cause you to lose steam and stagnate (which demotivates you and your staff). Your business could also lose customers to competitors that are more dynamic and can offer more products or services, or better prices or terms.

Not having a growth mentality could also cause you to miss opportunities like — to bring up that chocolate example again — creating a collab coffee line with a local roaster (tapping into their equipment and expertise, thus minimizing your expenses and learning curve), or snapping up another small business because a rival chocolatier wants to retire, for instance.

Explore your options rather than moving to a default “not now.”

Rule #3: Get help when you need it

Clearly, the growth small-business owners need most is a “Goldilocks” set of circumstances: not too hot (fast), not too cold (slow)....juuuuust right. As a new entrepreneur, you may be unsure about how to assess every opportunity from every angle. That’s okay.

You can access advice including coaching and mentoring from seasoned industry experts by joining a trade group, industry association, or, for younger start-ups, by joining a business incubator or accelerator program.

Or you could hire a business consultant experienced in your field to help you create short- and longer-range business plans that include growth strategy.

You could even take on a partner to share funds and risk, and to tap into a skill set that complements your own and rounds out your weaknesses (chocolatier or yogi, meet actuary!).

Bottom line: there’s more than one way to grow. The key is finding the one that works best for you.

By Staples Canada

October 12, 2020

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