New year, new strategy! Now’s the time to look closely at your business and seize opportunities for growth.
For small business owners, this is surely a daunting and overwhelming task. But for those looking to grow, the work they do now to improve their business could be the difference between plateauing and achieving new revenues and profits in the future. Here are five important steps to prepare your small business for growth in the new year:
Operations is the foundation of any business, big or small. You simply cannot grow a business sustainably if procedures and standards aren’t established and enforced. Give attention to your back-end operations such as billing/accounting, administration, human resources, and data processing. Accept feedback from your employees on where they see room for improvement, and then plan to make the necessary changes.
Evaluate your performance companywide. Determine if the company as a whole is meeting expectations. When coming across weaknesses, evaluate their source: Is it a personnel issue, or perhaps technology and equipment related? Growing can include expansion, so it’s important to fine-tune your strategies and project management capabilities to support any current or future personnel additions.
Lastly, assess the value of the tools you use as a business. Whether as quick to install as cloud-based office software or as complex as heavy-duty production equipment, the tools and technology you purchase are only as valuable as the work they enable your company to do. It’s especially important to track the age and maintenance/upgrade requirements of equipment, since sudden technological issues can quickly render expensive investments useless. Being excited about achieving growth is great —- so make sure your resources can support the work that this new growth will require.
Business development is at the visible core of business growth. It seems simple: Generate leads, present products and services, qualify opportunities, and close new deals. But it’s important to involve yourself in the business community you seek to serve sooner than you’re planning to pursue growth aggressively. Building your business network takes time and it’s likely you’re already involved somewhat in your local small business community. Speak with local chambers of commerce or trade associations about leadership and sponsorship opportunities, positioning yourself as an expert in your field. The key is to create community and credibility first, then you’ll have the right foundation for acquiring new customers.
Increase the visibility of your business by identifying members of your team suited to roles in business development and deploying them in the field. Building your reputation locally and energizing your team simultaneously is an incredibly efficient use of resources. Get your employees excited to see the company grow and watch their productivity gradually increase as well.
Plan to spend a few months with a sole focus on running your business in the most efficient way possible. During this time, look only at today, not forwards to the future and the growth you’re planning to achieve. The key is to optimize efficiency while running at your best current speed, enjoying the clarity that heightened efficiency produces and improving your business for the sake of doing better work and improving profit margins against existing revenues. Allow your employees to become comfortable with changes in role, distribution of work, and overall shifts in operations and management. When you feel you’ve perfected the way you do business, you can then move your attention back to a forward-looking management emphasis.
Much like starting a business, growing one is an investment —- and a large one at that. It’s important now more than ever to invest revenue back into your company, but that’s not the only place to find funds. Speak with your accounting firm or CFO to determine if there are opportunities available for you to lower you taxes as a small business. If you can foresee travel or equipment purchases for your company, assess the best way to finance those costs. Run various what-if forecasts and decide now if you’ll deduct the full costs of equipment at once or if you’d benefit from a lease instead of a purchase (or other financing options).
Often, the best thing you can do to prepare for future growth is to save money today. If you’re dedicated to the legacy you’re building, seek to eliminate unnecessary costs where necessary to see that through. If applicable, speak with an investment banker or angel funding group to calculate the feasibility and risks of seeking outside capital to further support your expansion plans.
A basic in-house bookkeeper can’t replicate the value of a full-service, professional accountant. Every business needs someone looking at all the numbers and spotting warning signs of future potential cash flow issues or possibly risky financial decisions, both of which small businesses can be especially prone to. When you’re small, it’s much easier to stay small than to grow bigger. You can grow complacent, doing things the way that you always have. By the same token, the competitive marketplace almost always ensures that businesses who stay small often end up failing as competition intensifies.
For all of these strategies, a great first step is to speak with your professional accountant, CFO or CPA. They can guide you through the right questions to ask, as well as the right answers to choose. Tax planning is just the beginning, and to achieve successful growth you’ll want to discuss operations, accounting, human capital, fixed vs. variable costs involved with scaling the business, and both debt and equity financing options. By focusing on these priorities in a measured, strategic manner, you’ll be well-positioned to achieve the next level of growth for your small business.