Growing Your Business
Nothing is as exhilarating as watching your business grow. Yet rapid growth can also stretch your resources to the limit, so you need to plan carefully before you turn up the volume.
To grow successfully, you need robust systems, a capable team and a well-honed marketing strategy. Most of all, you need healthy cash flow and plenty of capital behind you. That’s because rapid growth usually requires a significant investment in new staff, equipment and supplies, long before that extra revenue winds up in your bank account.
Step 1. Get your systems right
Before you go all out to win new customers, you need to make sure you can deliver when they start coming through the door. That means developing efficient, well-documented systems that can be executed consistently time after time, even by new hires. Your operations manual should include systems for:
- Accounts management, including quoting, invoicing, tracking accounts receivable, paying staff and suppliers, and monitoring cash flow.
- Customer service, including everything from answering the phone to making the sale.
- Inventory and supply management, including stock control, pricing, ordering and warehousing.
- Sales and marketing, including processes for generating and converting leads, cross-selling, logging customer contacts and analysing profitability.
Step 2. Plan for growth
Having fine-tuned your systems, you’re ready to write your growth plan. As with any business plan, it should be built around specific, measurable goals with target dates and clearly assigned responsibilities. It should also include detailed financial forecasts mapping exactly how much you’ll need to invest, how much extra revenue you hope to raise and when you expect to bank it.
Step 3. Arrange finance
Next, you need to decide how to fund your growth. Few businesses can afford to fund growth entirely out of cash flow. Unless you have a reserve of retained profits or extra capital, that may mean you need to think about a business loan to fund your expansion. Also consider using asset finance for new equipment or an overdraft for short-term working capital while you’re waiting for that new revenue to start rolling in.
Step 4. Start selling
With systems, plans and finance in place, you’re ready to start selling. Try a variety of marketing and sales strategies to generate and convert new leads, then track the results carefully to see which is most successful. Meanwhile, don’t forget to target your existing customers with cross-selling, referral and retention programs.
How to avoid growing out of business
- Try to grow incrementally in controlled stages, rather than going for the big bang. That way you can perfect your systems and test different marketing strategies before investing too much.
- Ensure your prices cover all of your costs, including the fixed costs of doing business, as well as your own time. Remember, your aim is to maximise your profits, not your sales. Sometimes that can mean selling on quality or service, rather than price.
- Track cash flow religiously, updating your forecasts as you go. Many businesses try to grow too fast and run out of cash before their growth plans bear fruit. Don’t let it happen to you.
Talk to us
Our experienced Relationship Managers can help you find the right financial solutions to help your business grow. Here are some of the ways IMB is different:
- You’ll receive personalised service from a team who are part of the community where you live and work, not a faceless call centre. Our Business Banking specialists have decades of experience helping businesses just like yours through good times and bad.
- We offer a full range of business solutions — from EFTPOS and overdrafts to leases and debtor finance — all at very competitive rates.
- We’re also one of the few commercial lenders to offer 25 year loan terms, so you can manage your repayments to suit your business cash flow.
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The information presented is of a general nature and is not intended to be relied upon as a substitute for financial advice. Lending criteria, terms and conditions, fees and charges apply.