When you seek advice online from business blogs and industry media, almost all of them will furnish you with tips and advice on how to grow your business, as well as tell you how important it is. But is increasing the size of your business something every entrepreneur be seeking?
The fact is that while growth is a viable option for most new businesses, it’s not always essential once you get a particular size. It’s also important to understand that growing a business isn’t without its risks, for a variety of reasons – many growing companies have ended up failing because they haven’t been able to handle expansion and all that it involves.
With this in mind, we thought we would look at some of the things that all business owners need to consider before exploring growth – and how to make the right choices for your situation. Let’s take a closer look.
Judging the right time?
First of all, while growth might be at the forefront of your mind, you have to wait until your business is ready and prepared for expansion. You might be working on the small scale right now, and everything’s going perfectly. You can fulfill orders in double quick time, and every customer leaves your business with a smile on your face. But what happens when you invest in a big marketing push and the orders start to flood in? How much impact will it have on the speed of your service, and do you have the resources to deal with the extra load? And finally, how will your previously loyal customers react when your once-excellent service levels start to go down the pan? All these things – and much more – can occur when you start to grow your business, so it’s vital that you have as much as possible covered.
Affecting your exit strategy?
If you own a private company, it’s more than possible that you are reaping great rewards just as things are. You can pay yourself huge dividends, a huge salary, and efficiently run a lifestyle company. Perhaps you are only working for a maximum of thirty hours a week, too, managing to achieve success at the same time as paying people low wages. In short, you could be raking it in and enjoying a wonderful living. However, trying to grow your business is going to change things dramatically. You might need to get investors involved, who may not be happy with your enormous dividends. Your hours of work will increase significantly – as will the amount of pressure you are under. To conclude – you just might not fancy expansion as much as you think.
Got the right team?
Big businesses have vastly different needs and demands than smaller companies and startups. And that could cause trouble if you are planning to grow with the exact same management team that has brought you all your success so far. While your team leaders and managers are all capable of running your business as it is now, it takes a different kind of experience and set of skills to run a large company – and the simple truth is that they may not have it in them. You might have to replace key people with new hires – or even contracted specialists. And that is going to be tough on your current employees, who may well take it out on you.
Moving to the right country?
Many businesses see expansion into new territories as the best way to play the growth game And in many cases, doing this offers a fantastic opportunity. But, like everything else in business, success isn’t cut and dry. Even if you are getting lots of orders from a particular country, it doesn’t mean that setting up there will be a good idea. Many nations are unstable, and it’s vital to take care that you look for countries that have enjoyed long periods of growth – take Ras Al-Khaimah in the United Arab Emirates, as an example. His Highness Sheikh Saud bin Saqr al Qasimi of RAK has plenty of policies in place that has seen GDP per capita increase by an astonishing level in the last couple of decades. And, the result of countries such as these is often a business-friendly nation that encourage foreign investment and job creation. Avoid unstable countries and keep an eye out for potential problems before moving your business into new territories. Choose the wrong place, and your expansion could ultimately end with complete and utter failure – and destruction.
Have the right systems?
The technology and systems you have in place right now may not be able to manage your growth, either. You will need to make a significant investment in upgrading, although you might be able to reduce some of those costs by using cloud services – assuming they allow you to scale up or down as needs be. And don’t forget, the bigger the systems you use – whether networks, data centers, or servers – the more complicated they are to run. That means more expertise that costs more money, which ultimately relies on being a success. With such an investment necessary, there isn’t much room for your business to make many mistakes, and the results could be catastrophic.
Ready to communicate?
Growth and expansion mean you have to be able to communicate to everyone your business is in contact with. Customers will need assurances that you still offer the same services as you always did. New clients and markets will need to understand precisely what you do, so your messaging has to be crystal clear, or you will struggle to gain any further traction. Your suppliers will also need to be informed at every stage – if they don’t have the ability to provide you with the right amount of raw materials, you will need to look elsewhere. And, finally, there is the importance of communication with your employees. Growing a business means change – and it can happen quickly, which will cause many worries and concerns for every member of your team. So, to conclude – if you want your staff to come with you on your journey, communication is nothing more than critical.