Starting a business is often about having a great idea or a passion that you just have to pursue. Then there’s a lot of hard work, research, planning and fundraising that has to be done to make that business idea a reality. Hopefully, all that sweat and toil pays off and you’ve got your business up and running. However, that’s when the hard work really begins.
No business can afford to stand still, and in today’s marketplace, if you’re not growing, you’re dying. As soon as you achieve one business goal, you need to step back, take a deep breath and focus all of your energies on the next mountain to climb. Ask yourself how you can build on the foundations you’ve already established to better your business position, and what you need to do to keep moving forward without overstretching your resources.
Refocus your business plan
Go back to your initial business plan and see how it stands up from your current perspective. Have you achieved your goals within the timeframe you initially set out? Have your goals changed, and do you need to set new targets? Look at what areas of your business are working out well and what is holding you back; these may be different from what you initially envisaged.
You should also look rigorously at your business expenses to see where you can make savings. It pays to shop around for better contracts or different suppliers, as well as alternative sources of funding. Check your budget: is it keeping pace with actual costs, which inevitably rise each year?
The importance of equity
Equity is defined in business terms as assets minus liability; that is, the value of your company’s assets minus your debts. Equity determines your company’s value and can also be used to finance expansion without taking on further debt, by the sale of shares or stock. This is known as equity financing, and the downside is that you could end up giving away control of your business. Depending on your position, business loans and overdrafts could be a better way of acquiring the working capital you need to expand, innovate or just keep on top of cash flow.
Expanding your business
The ways a business can grow obviously depend on the nature of that business. Physically expanding to another location is an obvious choice, but this shouldn’t be undertaken without careful research and auditing. You’ll definitely need financing, as well as a whole new business plan.
Establishing franchises can allow you to expand nationally or even internationally without overstretching your resources. You’ll need a mentor with experience of the franchising process and a good lawyer. Licensing your product is a lower-risk and less labour-intensive option, but again, a good lawyer is essential to protect your intellectual property rights.
Other options include forming an alliance with a complementary business, diversifying into complementary areas yourself, adapting your product for other markets, and expanding digitally. The important point is to never stand still or become complacent. Innovating and adapting to new trends are the keys to survival, and keeping abreast of what’s happening in the wider world will allow your company to stay one step ahead of the game.