There are a lot of fears to be had when it comes to growing your business. The "hows" and "when" are sometimes hard to answer, but we at ProStrategix have worked with dozens of businesses to figure that out for them, and we want to help you find out the same for yourself.
An article in Forbes titled Five Signs You're Ready To Grow Your Small Business highlights five signs that you are ready to grow your small business. With all respect, we would argue that there are really 3. If you wait to grow your business until all these criteria are met, you may be beset with other problems.
So, here are OUR three signs that you are ready to grow your small business.
On this point, we agree. The demand for your business needs to be strong, and the local trends in your market should also indicate that this demand will continue before you are ready to grow your small business.
We recommend using industry projections with caution. While industry projections as a whole can be helpful, they are usually national in scope. Therefore, they can be of limited use. In other words, make sure your local demand is strong before growing your small business.
In general, small businesses are affected most by local trends. Local trends can vary significantly from national trends. For example, there is a national shortage of doctors. However, this is not the case in New York City, where there is a surplus in some specialties. In this case, relying on a national trend would guide you in the wrong direction.
While having 3 years of profitability would be great, you will likely start to plateau if you wait that long to grow your small business.
Small businesses are typically limited by people. Once they hit their maximum, they can actually become less efficient. So, each new customer is a little less profitable than the last because they are paying overtime, etc. Or, each new customer is a little less satisfied because quality starts to suffer due to burnout, etc. After than, growing your small business is more challenging, and it is harder to get capital without pain
If demand is high and you are profitable, it probably isn't best to wait 3 years to grow your small business.
In the real world, we know of very few small business owners who would say the business could run without them or their schedule is pretty open. On these points, we disagree the most.
If your schedule is pretty open, then demand isn't likely to be high. In this case, focusing on driving demand is probably more important than trying to expand your small business.
Most small business owners wear multiple hats. Therefore, it is often necessary to grow your small business in order to hire the talent so the business can start to run without you.
The key is to grow your small business without significant disruption to your current business due to distraction, inattention, or the like. This is usually the most difficult point, and where we've helped many businesses manage this process.
Importantly, having a plan in place so you are ready to grow your small business is something that we believe all small businesses should do. Why? Because, if you wait until you are growth before you plan, it can create a number of avoidable headaches. In other words, "If You Don't Plan for Growth Now, You'll Hate Yourself Later". In that post, we explain those headaches in more detail.
Brian Cairns, CEO of Prostrategix Consulting. Over 25 years of business experience as a corporate executive, entrepreneur, and small business owner. For more information, please visit my LinkedIn profile
ProStrategix Advisors Copyright 2020 © All rights Reserved.