Category: Business Planning

What to consider when growing your business

What to consider when growing your business

what to consider when growing your business

Growing your business is an exciting, exhilarating and challenging time. There are a lot of factors to consider in understanding if it’s a good time for your business to grow. Whether you’re anticipating expanding your location, team, or product or service line, there are several key decisions to make when taking your business to the next level.  

This article will dive into the key opportunities to consider when you’re ready to take the next steps in your growing business.

The need to grow a business can come from a variety of factors. Some indicators that you may want to consider growing your business are: 

  • Your business is growing organically and you want to be more strategic about how to expand
  • Your customers want products or services that you don’t offer
  • You have identified a new target customer for your current products or services 
  • A new market for your current products or services has emerged
  • Your products or processes can be innovated or improved
  • Competitors have left or entered the market and changed the landscape

Growth makes sense when it’s needed to meet customer demand and/or to remain competitive, but it’s important to understand the financial and organizational impacts to your business.

When looking at the financial aspects of growing your business, consider where you might get access to funding:

  • Do you have extra cash in the business? 
  • Do you have additional inventory that you can sell?
  • Do you have outstanding accounts receivable that you can collect? 
  • Do you have access to new investors, loans, or grants that could fund the growth? 

When growing a business, sales are always considered, but it’s also important to estimate how much the cost of goods/services sold and operating expenses will increase alongside an increase in sales. With these numbers calculated, if there is an increase in all or most of these numbers, this is a sign that growth could make sense:

  • Net profit
  • Gross margin = gross profit/revenue
  • Operating margin = operating profit/revenue
  • Net profit margin = net profit/revenue

Ensuring that your business is financially ready is key to success, however you should make preparations beyond your finances to map out successful growth.  

Operationally, consider the requirements needed to grow:

  • Do you and your staff have the expertise and time to implement growth strategies? Will you need to hire additional team members or experts to support your business growth? 
  • Does your business have the operational and systems capacity to sustain growth? Consider your manufacturing, equipment, website, CRM, and other tools you need to grow your business. If not, can you use the financial resources available to you to put those requirements into place? 
  • Would any amendments to your products be needed to accommodate intellectual property or safety rules in another country?

Lastly, growing a business can be taxing, not only on a business owner but on the employees of your organization as well. Taking care of your people, your processes and yourself is key in expanding your business. Consider how you might update, adapt and communicate the culture of your organization to prepare your team (and yourself) for the road ahead: 

  • As a leader, consider how you might take time to prepare, coach and upskill yourself and your team
  • As your company expands, what is your plan to provide additional support to your team through organizational growing pains? 
  • How will you recognize and retain the people you need to help your business expand? 
  • How and when will you ask your team for input on the growth strategy? 

Growing your business is challenging, however consistently asking yourself these questions and creating (and consistently revisiting) a plan will help you as your business grows. For more information and advice on how to review your business’ finances, operations, and readiness and to assess if you’re ready for growth, you can meet with an ATB Entrepreneur Strategist

Start with SWOT: Using a SWOT analysis as a strategic tool

Start with SWOT: Using a SWOT analysis as a strategic tool

SWOT Analysis header

A powerful business plan addresses all of the known factors pertaining to your company’s future, but before you can build your plan, you should complete an honest evaluation of the positives and negatives around your idea. Developing a thorough SWOT analysis will identify many items you will need to include and address in your plan.

SWOT stands for:

These 4 elements can be put into two main categories:

Internal (strengths and weaknesses)
External (opportunities and threats)

A detailed inventory of your weaknesses and threats will put you in position to anticipate the challenges you will face as you get your business up and running. You can then leverage your strengths and opportunities to build strategies for facing those challenges. Planning this out in advance will allow you to act quickly and decisively when issues arise.
These can be communicated in your business plan to show that you know what you are up against and how you will deal with it. This is important to prospective lenders, investors and partners. More importantly, it gives you a solid foundation from which to view your business and the environment in which it must function.

Internal Factors

Strengths – What are the strengths that your business and your key people bring to the table? This may be experience, education, contacts in industry, physical or intellectual property, expressions of interest, access to capital, etcetera.

Weaknesses – What is currently lacking when it comes to your business and key people? This may be lack of equipment, industry knowledge, capital, key contacts, business acumen, etcetera.

Note: These are simply suggestions and not an exhaustive list. Each of these could be included as a strength or weakness depending on your specific situation. Be open minded and honest as you populate your own lists.

External Factors

Opportunities – What opportunities exist outside of your business that you may be able to capitalize on? These could be a growing market, changing legislation, economic shifts, lack of competition, success of a complimentary service, government support for your industry, etcetera.

Threats – What threats exist outside of your business that you may need to deal with in order to succeed? These could be a surge in competition, inflation, labor shortages, new technologies taking market share, lack of government support for your industry, etcetera.

Note: These are simply suggestions and not an exhaustive list. Each of these could be included as opportunities or threats depending on your specific situation. Be open minded and honest as you populate your own lists.

SWOT analysis

SWOT Summary

In your business plan, you can include your entire SWOT analysis, but it is recommended to have a summary outlining the findings and learnings of your SWOT analysis. This gives you the opportunity to easily demonstrate how your strengths and opportunities can be used to deal with the weaknesses and threats the business must deal with.

Targeted SWOT Options

A general SWOT analysis, like the one mentioned above, is helpful in analyzing and presenting an overall view of your business. It can be applied at the startup phase or at any time during the lifecycle of your business where an evaluation might be helpful.
It is also possible to use the same format to analyze specific parts of your business. For example, many businesses use SWOT specifically to analyze their marketing, operations or human resources. You can also apply the SWOT format when researching your competition to see where you may be able to get an advantage.

A Living Document

Like your business plan, a SWOT analysis is a tool that is valuable throughout the life of your business. Situations constantly change, so use your SWOT as a living document and revise it on a regular basis. Use it to keep track of the strengths and weaknesses within your business as they evolve, stay ahead of new threats and capitalize on emerging opportunities.