Congratulations! You have made it past the first couple of years during which many small businesses fail. We know how hard you have worked to get to this point and how many hours you have physically put into your business to succeed. In fact, most small business owners do exactly that; work in the business rather than on the business. But, while growth is exciting, it can also be the downfall for a business that doesn’t plan properly. Here are some things we would like for you to consider when you decide the time is right to grow your business:
Growth requires planning. One of the most important items to have in your business is the business plan. Many business owners have a great business concept but have not taken the time to think about the details of their operations on all of the components of their business. Having the details of the business written down allows owners to see where there is room for improvement and it can also demonstrate the thoroughness of management. It documents what is going to be done; how and when steps are going to be taken; who is taking these steps and what the financial implications will be. The plan does not have to be a lengthy document as long as the key components are incorporated.
You need to do some research. Who is your customer and how are you reaching them? Your business is providing a solution to a customers’ need or problem which is great, but do you know who they are? Have you defined that your ideal customer is a middle aged women living in the Savannah area with an annual income of $75,000 who has two pets, 3 children and owns her own home? If you can’t define your customer, you can’t reach them because you don’t know how. It’s important not only to understand who the customer is but how to reach them so that you can tell them about the problem you’re solving for them.
Your role in the business may change. When small businesses start out, the owner usually wears all of the hats in the company and does everything from filling orders to sweeping up the shop. But, as you continue to grow, so will your role in the company. As a small business owner, you may not be great at all aspects of the business. For example, maybe you’re really creative and are great at coming up with different marketing strategies but numbers aren’t necessarily your strong suit. At the point of growth, it’s best to bring people in who are good at specific operations so that they can be performed and have a dedicated person to help with this function.
You have to operate by the numbers. Even if numbers are not your passion, as a small business owner you need to know what the financial reports are telling you. If you’ve ever been told that the business is making a profit but your bank account is empty, it’s time to start managing by the numbers. Knowing what financial statements like your profit and loss and cash flow statement are telling you can help you forecast for future growth.
Evaluate your current operations and be willing to make process improvements. Documented, consistent processes are a key to building a scalable, well-managed company. Understanding every operation in your business will not only help you to operate smoothly but it will also help you to create an exit plan when you’re ready to close or sell your business.
Becky Brownlee and Rachel Alpaugh can be reached at the UGA SBDC if you would like to discuss growing your business. If your company has been in business for a minimum of 2 years and you feel that the time might be right for growth, you may qualify for the SBDC GrowSmart Program beginning October 11, 2016. For more information, contact the Savannah SBDC at 912-651-3200 or email Becky Brownlee at firstname.lastname@example.org