“The biggest risk is not taking any risk… In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” – Mark Zuckerberg
Are you a small business owner, and are you ready to expand your business’s reach into new territories? Furthermore, are you looking to develop new products or services to drive your business growth? If so, have you determined how you are going to fund your new product development? These and other questions are fundamental to the growth of your business, and they need to be asked on a regular basis.
Business growth and why?
Before we look at ways to pay for your business growth, let’s have a look at what solid business growth is, and why you should expand your business.
The BusinessDictionary.com defines business growth as “the process of improving some measure of an enterprise’s success. Business growth can be achieved either by boosting the top line or revenue of the business with greater product sales or service income, or by increasing the bottom line or profitability of the operation by minimizing costs.”
There are many reasons to expand your business. Some are:
- Increased financial gain
This is possibly the ultimate reason why business owners like to grow their business. In a nutshell, if you sell more, you will increase your bottom line, and ultimately your nett profit. However, to sell more, you need to have more stock. Consequently, you need to purchase more stock, so you require more money to buy the extra stock. How do you fund the acquisition of additional stock? Well, there are several ways to obtain the finances to increase your stock levels. In my opinion, one of the simplest ways is to take out a business loan.
- Respond to a greater market demand
When your customer base likes your products, they will buy them and spread the word amongst their family and friends. As an aside, social media is helping to spread this message to a greater audience; ergo, it is time to expand your business and increase your stock levels. If you ignore rising demand, then you stand to lose both your existing customers as well as your potential consumer-base. Therefore, if you currently do not carry enough stock to meet the demand, then it is a good idea to purchase more stock as well as consider expanding your product range.
- Improve business stability
Your business is likely to be more stable with a greater number of employees and customers than as a one-person business with a limited number of clients. The reason for this is simple. There is a limit to how much income one person can generate on his/her own. Once you start adding employees, your potential for revenue generation will improve. The added benefit is that as your business grows, people will perceive that you can service a larger market. Consequently, your customer-base will start to believe that you are in business for the long-haul so that they will trust you and purchase your products and services.
- Business sale
It is important to consider the possibility that you might want (or need) to sell your business at some point in the future. Even though it is the furthest thing from your mind now, what about the option of retiring one day? It goes without saying that the bigger and more stable your business is, the more money you are likely to fetch in a sale. Therefore, it is a good idea to put plans into place to increase your business’s sales figures, and ultimately, its bottom line.
It is worth noting that, while it is important to expand your business so that you can provide a service to a greater number of customers; however, on the flip side, it is vital that you do not put yourself and your business at risk by expanding too quickly.