Many business owners, having survived the initial start-up phase, devise plans to grow their business in order to increase profits, take on more staff to help them run the business or maybe to save up for premises. There are a number of points to consider before embarking on this process:
Does the business have a Business Plan?
This will cover areas like how will the business be grown (marketing, networking, on-line, new products or services etc), what are the key targets and dates, a SWOT (strengths, weaknesses, opportunities and threats) analysis and also financial projections to establish whether any external funding is needed. Download 360 Mentor’s free SWOT analysis template here.
Will funding be required?
When a business grows there is often a drain on cash thanks to additional stock being purchased, funds being tied up in debtors or work in progress and additional overheads being incurred. The financial projections should help in establishing how much funding is needed and also with any external funding applications.
Are there any grants available?
Grant providers are keen to help growing businesses, particularly those that are creating jobs in deprived areas and investing in machinery.
Systems
Will the systems (purchase ordering, sales, financial etc ) cope with the extra volume of transactions? Are the financial systems in real time and able to give an instant snap shot of how the business is performing? This will be key in making swift decisions as the business navigates the pathway to growth.
Does the business need to increase its insurance cover?
If more staff are taken on, additional stock is being carried or assets are being invested in, then the business’ insurance broker should be consulted to ensure the business is still adequately insured.
Are all legal requirements being met?
This is often an area that business owners will neglect in the early stage of the business cycle but should be addressed before a growth drive and includes areas such as terms and conditions, HR, GDPR, health and safety and insurance.
Are there any tax breaks available?
A larger business may wish to look at one of the VAT schemes, Research and Development Tax Credits, HMRC Employment Allowance or quarterly PAYE payments to reduce tax payments or assist with cash flow.
Who will mentor the business owner(s)?
Just like most champion athletes have a coach, many successful business people engage with a mentor; someone who has been through the business growth cycle and is there to offer impartial advice and be a sounding board for ideas.
Are the business’ external advisers up to the challenge?
Utilising the services of proactive, qualified and experienced accountants, lawyers and bank managers will be key to the success of any business growth strategy. Use advisers that have set up and grown businesses themselves or ask for recommendations from peers who have been through this process.
Following these guidelines will increase the chances of achieving the business’ goals without any major catastrophes along the way.