Business growth is an essential goal for any business as it allows you to stay competitive in your industry, expand your business’ offering, make your employees happier and increase your business’ potential.
Whilst there is no one-size-fits-all formula to achieve business growth, but there are a few things you can do to give your firm a boost and encourage expansion.
Many start-up businesses and SMEs want to achieve business growth at some point, not many know how to get there. At the start of last year, small businesses accounted for 99.3% of all private sector businesses, making it all the more difficult for individual organisations to get noticed and compete.
However, there are a few basic principles that you can employ to kickstart your business’ growth and get ahead of your competition. Read on to learn how to grow a small business into a large business and reap the benefits of trading on a larger scale.
The 4 stages of business growth
There are 4 key stages of business growth that you need to be aware of. These are:
Understanding each stage in detail will help you to determine what it takes to reach the next level, and thus expand and grow your business.
Stage one: Startup
Reaching the startup phase can be a challenge in itself, and this is the reason why so many new businesses’ fail. However, this shouldn’t deter you from spurring on and working towards business growth.
Startups can face difficulties such as lack of funding, poor cash flow management and lack of rigid processes and systems – all of which can thwart business growth. In order to counteract this and move to stage two, it’s important that startups carefully manage cash flow and cement their position in the market. This will help to create a steady stream of cash that can be reinvested into the business so that it can expand.
Stage two: Ramp-up/Build-up
In this stage, it’s likely that you already have a stable client base, a steady stream of income and a team of employees working with you to achieve your business’ goals. However, it’s important to avoid getting complacent in this position.
In order to encourage growth in this phase, it’s important to make sure that your business can keep up with increasing demand. To do this, you could take on an additional employee or outsource some of your business’ processes. Whichever option you choose, it’s best to make sure that you have enough resources and time to allocate to the new business that you have coming in.
Stage three: Expansion
This name of this stage is slightly misleading, as your business has already been expanding and growing up until this point. In reality, this stage involves opening up your business to potential investors and other stakeholders.
In order to attract investors, it’s important to make sure your financial records are up-to-date and accurate. This allows you to show clearly why you need additional funding and where the funds will be used. Once you’ve attracted the investment you require, you’ll have everything you need to reach the final stage.
Stage four: Maturity
The maturity stage of your business growth occurs when growth has slowed, and there are fewer organisational changes to deal with. However, this doesn’t mean that you should sit back and relax.
In order to encourage further growth at this stage, it’s important to innovate and stay ahead of the competition and focus on employee retention by boosting morale and motivation.
If you’re ready to take your business to the next level, but you’re unsure of how to achieve this, we can help. Our growth business accountants can help you to overcome some of the common financial mistakes and problems that SMEs and entrepreneurs face, so that you have the resources in place to expand your business.