Getting your business up and running is a major accomplishment. Setting your business up for future success requires a long-term strategy that should take multiple factors into account such as technology, marketing, and employee recruitment.
Growing pains can be challenging, but the benefits are worth it. Here are seven ways to get you started on creating a plan for long-term business growth:
1. Figure out where you are
Before you begin looking for ways to grow your small company, it helps to figure out where you are on the spectrum of business development. While there are many business models and systems that help gauge progress, experts at Harvard University defined five primary stages of small business growth as follows:
Stage 1: Existence
You have started the business and are focused on obtaining customers and delivering products and/or services. Typical challenges include having enough customers, providing quality products and services, and obtaining enough cash to continue operations.
Stage 2: Survival
Your business is succeeding and has enough satisfied customers to continue operations. Challenges during this stage include covering equipment repair and replacement, managing finances, generating enough cash flow, and obtaining funding for expansion.
Stage 3: Success
Your business is profitable and is reaching key goals. Now management is faced with a decision to either expand current operations within the existing business structure, or to diversify into alternative activities.
Stage 4: Take-off
The business is expanding rapidly at this stage, bringing new issues associated with financing that growth. Other problems include delegating management activities, and continuing cash flow. In some cases, new management replaces the original sole proprietor or entrepreneur that founded the company.
Stage 5: Resource Maturity
This final stage is characterized by consolidation and control of financial gains. Key challenges include retaining flexibility and maintaining the initial entrepreneurial spirit. Companies in this stage typically have ample financial resources, experienced management, and well-developed systems.
Knowing where you are on the spectrum will help you develop a strategy to move your business forward. In some cases, your business may be moving between these key stages of small business growth in both directions. In addition, the steps you take can differ significantly depending on external economic factors, so it pays to obtain professional advice before taking action.
2. Outperform the competition
Monitoring the competition is critical if you want to attract new customers, improve products, and upgrade customer service. In addition, market analysis helps you carve out a specialized niche that differentiates your business from the rest. Use competition as a springboard for ideas and innovation. Finally, assess your finances, determine how much capital is required, and consult your accountant if your plans are financially viable.
3. Upgrade your marketing strategy
Marketing is constantly evolving and changing to adapt to new market conditions. Once you know your financial position, you can develop a viable growth strategy and marketing plan to achieve critical goals. Here are some questions to ask when getting started:
- Are you trying to diversify into new markets or products?
- Are you simply expanding an existing product line?
- Is there more interest in ramping up marketing efforts in existing customer bases or moving to a new market with the same product offerings?
- Do you have a customer loyalty program that generates referrals?
Marketing has evolved beyond traditional advertising methods. Modern content marketing strategies put your product or service in front of potential customers with sales funnels customized for your target audience. In addition, inbound marketing techniques leverage SEO to attract new customers while they are searching for your products and services.
Create a marketing budget that aligns with your long and short-term goals. Managing small business finances is not always easy, however an investment in marketing pays dividends in the long term.
4. Embrace technology
Among the most valuable finance tips for small business owners offered today is the recommendation to embrace technology. Modern financial software easily tracks personal finances, business expenses, credit card transactions, tax payments, and business assets. When integrated with customer relationship management and payment systems, your business can reduce costs, improve efficiency and boost productivity.
Current software also simplifies small business cash flow management by providing customized dashboards with real-time data. As a result, finance teams can quickly produce income reports, balance sheets, and cash flow statements with pre-defined settings that save time.
Managing your small business finances doesn’t need to be complicated. Modern software is a worthwhile investment that organizes your books with clear and consistent bookkeeping and helps you produce clear and straightforward reports at regular intervals. Besides making day-to-day operations easier, accurate reporting provides your business accountant with data that impacts long-term business decisions.
5. Develop a hybrid work strategy
COVID-19 mandates forced many businesses to lift off into cyberspace and embrace remote work strategies. By allowing employees to work from home, many companies were able to reduce costs while allowing workers more flexibility and a better work-life balance.
Hybrid work may not be for every business, however the digital workplace brings unique benefits for many companies. Try investing in digital tools and integrated software to simplify workflows and automate processes. Besides reducing costs and improving efficiency, a hybrid strategy allows you to expand your geographic search area to find the best candidates.
6. Attract the best talent
COVID-19 mandates forced many businesses to lift off into cyberspace and embrace remote work strategies. By allowing employees to work from home, many companies were able to reduce costs while allowing workers more flexibility and a better work-life balance.
Hybrid work may not be for every business, however the digital workplace brings unique benefits for many companies. Try investing in digital tools and integrated software to simplify workflows and automate processes. Besides reducing costs and improving efficiency, a hybrid strategy allows you to expand your geographic search area to find the best candidates.
7. Seek outside investment
Some small businesses require additional capital and professional business advice to expand into new territory. If your business is at Stage 3 (see point #1), then you may want to consider getting more funding to grow your business.
Before seeking investment, get your books in order with an experienced business accountant that understands your position. Provide total financial transparency with professionally-prepared financial statements that communicate the status of your business. Multiple funding options are available for companies looking to grow, so consult with your accountant while assessing options.
Grow your business with confidence
Ascension CPA meets you at your stage of business growth with finance professionals and business accountants that helped grow companies just like yours. Contact us for a complimentary consultation to learn more ways to financially grow your small business.
