Planning Your Business Growth
If you've got a profit-making home business on your hands, the
next step is growth -- expansion into new markets and new
products. But how can you grow when the physical space you have
is so restricted?
So if you're going to grow, you need to figure out if:
* it's right for you; * your business is up to it; and * you
and your fellow owners and management will rise to the challenge.
Above all, you need to understand the challenges your company
will face as it goes through the various stages of growth.
Outsource More
A typical problem when your business starts to grow is that you
find yourself spending a lot of time on all the small
administrative tasks your growth creates, leaving you with less
time to do all the extra work you're getting.
The answer is to start outsourcing those small, time-consuming
tasks, like bookkeeping, invoicing and the rest. Outsourcing
lets you concentrate on what you're best at while getting the
other things done by professionals. They'll have a system in
place that lets them do what you're taking hours over in a
matter of minutes -- after all, it's what they do. Don't forget,
though, that you need to hold outsourced work to the same
standard of quality you hold your own to, since your customers
won't be making the distinction.
Create a Growth Plan
Remember that business plan you made when you started it all?
Well, growing your business isn't that different to starting a
new one: you still need to plan ahead, and know what you're
doing. Take out your existing business plan and look at what
needs to be brought up to date, what still stands, and what
needs to be added.
The most important thing to keep in mind when you turn your
business plan into a growth plan is this: don't forget your core
focus. Tempting as it can be to diversify into all sorts of
areas as a way to grow, you don't have experience in these areas
-- try to do more of what you know, and keep new things to a
minimum.
Financing Your Growth
While running your business, you might have become frustrated
with how much more you could do if you just had a little money
to invest. Equity finance is a popular way to raise money to
invest in a business. It involves you selling a small share of
your company to someone who is interested in investing. They
don't have to have any involvement in the running of the
business, necessarily -- the only real condition is that you
agree to give them a percentage of your profits equal to the
percentage of your business that you sold them, known as a
dividend.
But Don't Grow Too Fast
One thing that can be fatal for home businesses is trying to
grow too fast. Some people have a tendency to let success go to
their head, and will borrow tons of money to expand their
business at an amazing rate, only to have a breakdown when they
realise that they just can't manage a business that large.
Have You Considered Raising Prices?
If you've got more business than you can handle, that's not
expansion -- it's overtrading. You might be doing more work than
you need to, when you could just raise your prices. Try out a
few different levels, and you'll find the one that gets you a
manageable amount of business. It's a simple question of supply
and demand: you should be earning the same as you were before or
more, but doing less work.
Remember that growing your business doesn't necessarily have to
mean getting more customers. You can expand your business
financially just by selling more to your existing customers, or
providing extra 'premium' services on top of the ones you
already provide.
Could You Franchise?
This obviously won't apply to every kind of business, but if
you've found a successful formula, you could consider
franchising it. Franchising is especially common in the food
business, where risk-averse people starting new businesses often
want to do something that's tried and tested. You can,
effectively, sell your business plan, marketing materials and
the experience you've gained in business so far to these people.
Even though you should wait a while before you actually do it,
it's worth at least considering whether this could be an option
for your business, and starting to standardise everything and
get it down to a formula and assets that could be sold on.