5 signs that your business is ready to grow
Are you ready to grow your business? Scaling up can increase revenue, stability and market share - but it isn’t without its challenges. You’ll need to invest time, energy and money to successfully expand your operations. So how do you know when it’s the right time to take things to the next level? Here are five signs that could mean you’re good to grow.
1. Customers can’t get enough of you
Having consistently high demand for your product or services is a great indicator of growth potential. If you’ve got customers queuing round the block for your cupcakes, it could be time to open a second bakery. If you’re having to turn down plumbing jobs because you’re fully booked for months, it makes sense to take on more staff.
However, it’s important to conduct thorough market research before committing to growth. Look at industry projections - is the market likely to shrink or grow in the coming years? Could increased competition impact your potential market share?
You should also consider whether you can grow your business without having a detrimental effect on your current customers. If opening bakery number two means you have less time for quality control at bakery one, you might lose serious brownie points with your buyers.
2. Your bank balance is buoyant
Growth usually requires investment, so if you want to build your empire, you’ll need a firm financial foundation. But how do you know when you’re there? Ideally, you want to see growth in revenue and profit for the past three years minimum. The longer your profit and revenue have been increasing, the stronger the signs that you’re ready to grow your business.
It’s also important to review your cashflow. You’ll need to be sure that you have enough money in the business to keep things running smoothly whilst you also invest in growth. Costs could include additional staff salaries or new equipment, and you might not see return on investment (ROI) on these immediately. There are lenders and investors who can help fund your growth plans, but you’ll need to create a strong business growth plan to get them on board.
3. You’ve perfected your processes
It’s important to have great processes in place before you grow. Firstly, perfecting your setup means that your existing business can continue to thrive whilst you’re occupied with your growth strategy. Secondly, you’re likely to be scaling these processes as you grow, so they must be efficient. Replicating inefficient systems means undermining your productivity and profit.
And finally, to accelerate ROI, you’ll need to train and onboard new staff quickly. That can’t be done if your processes aren’t developed and documented. Don’t forget, you may need to implement new processes as your business grows, such as HR procedures, so it’s best if your other processes already run like clockwork.
4. You’ve got time to spare
You might think the best time to grow your business is when you’re at full capacity. But ideally you should aim to expand before you hit that critical point.
As a small business owner, you’ll be very hands-on with whatever it takes to grow the business, from finding bigger premises to negotiating new contracts. Even as your business grows successfully, there might be teething issues that need your attention, such as supporting new staff or troubleshooting processes.
This can all take you away from the day-to-day duties you normally perform, so think about how you’ll manage business-as-usual activities whilst you’re growing your operation.
5. You have specific goals
Business growth is desirable for many reasons, such as stability and revenue growth. However, growth for growth’s sake isn’t a good goal. Growing a business takes time, money and effort, so it needs to be part of a strategic plan. You should grow with a purpose.
If you have a vision for what you want to achieve - such as bigger profits, more market share or employing staff - that’s a strong start.
Once you’re clear on your goals, you can start work on your business growth strategy. Our guide to growing a business expands on many of the points above and will help make sure you’re on the right track.
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