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Prepare to grow your business
Take control of costs and liquidity
To have healthy growth, you need to prepare carefully to ensure the bottom line brings revenue growth. Increasing sales can be expensive if you haven’t optimized your business administration and organization and do not have a tight control of the company's expenses. At the same time, you need to keep an eye on liquidity, so any investments you make do not make you insolvent when it is time to pay the bills.
Use your network
It's a good idea to exchange ideas with friends, people in your professional network or others in your industry. It can open up new opportunities you may not have seen and make sure you do not repeat the expensive mistakes of others. You should also consider expanding your network by finding someone who has experience with what you are going to try with your business. A competent advisory board can also be of great help.
Create space for growth
Many entrepreneurs and owners of small businesses are constantly busy with all the big and small things it takes to run a business. This may lead to growth initiatives being implemented half-heartedly with a lack of focus and disappointing results.
You should therefore consider delegating or outsourcing some administrative tasks or other duties, or lowering their priority while you are working to create growth. Your growth ambitions are more likely to succeed if you can give them the necessary attention.
Where should growth come from?
The first step is becoming aware of your options. Depending on your business type, there are a number of different ways you can create growth:
- New customers
- New markets
- New products or services
- Add-on sales to existing customers (possibly after sales in the form of service agreements or additional sales)
- New sales channels - possibly new stores or online sales
- More or better employees
You should analyse each of these areas separately, so you can go through your options within each of them. Initially, you should consider every possible option and should not focus too much on limiting factors such as resources, etc.
This initial exercise gives you a starting point to prioritize your efforts.
What does it take to succeed?
Now add another layer to your analysis and consider the potential of each of the possible efforts: how likely they are to succeed, when they are expected to yield results and what they will require in terms of resources.
This is where you must reconcile entrepreneurial creativity and optimism with the realism of a bookkeeper, giving you the best prerequisites for success.
Prioritize and select your areas of action
Now you have an overview of the various possible options and a realistic picture of what they will require and what they can cause. You know what you need to prioritize your efforts.
One of your initiatives may have enormous potential, but be both expensive and time consuming to realize. Perhaps the likelihood of success is too low for the initiative to be worthwhile. It may be that more low-hanging fruit may be better to start with. It will differ from business to business and situation to situation.
Again, you should take a critical look at your options. Depending on the extent of the various initiatives, you should select a few of them - typically no more than 2 or 3 - and bet on them.
Make a plan and budget
Now we move from thought to action. You must lay down a concrete plan for your further work to create growth. You do this by breaking down the various selected initiatives into action points.
This means that for each initiative you must identify all the steps you need to take to qualify or implement it. Next, you should set deadlines for completing the first step of each initiative. You have to put some pressure on yourself. That way, you keep your momentum and ensure that the whole process does not become a desktop exercise without any action.
Meanwhile, you must also create a realistic budget for how your growth plan will affect your company's finances. Just like the content of the plan itself, you must keep track of the budget and make sure you stay within the limits you've set.
Execute your growth plan
Obtain the necessary funding
Growth generation often requires investment. Therefore, the first step is to ensure that you have enough funding to implement your plans.
Once your process is in place, there are a number of options for financing your growth strategy. They include:
- Private investors (e.g. business angels, family loans or crowdfunding)
- Funds and support schemes
- Export support
- Growth fund
- Bank loans / credit / leasing
To start talking with interested investors and other stakeholders, you need a well-developed pitch that will make your business plan look attractive.
As a bank, we have a lot of experience helping companies like yours grow. Take advantage of our skills to test your growth strategy and find the right financing solution.
Put together the right team
In the best-selling professional book "From Good to Great" one of the first tips is to put together the right team. You may also need to do this if you want to succeed in creating growth. New initiatives can often require the types of skills your business may not have.
If that's the case, consider how to best get the right skills for your business. Should you hire someone on a fixed contract, get a job, hire a group of experts, or should you try to find an external partner? It will depend entirely on your situation, industry and business.
Learn from the start-up mentality
Successful start-up companies are often quick to try new initiatives and then evaluate and possibly change them. In this way they are able to act faster and more smoothly than established companies. Facebook founder Mark Zuckerberg summed up the approach in the phrase "Move fast and break things", which for several years served as a mantra for the company.
This approach can give you a quicker indication of whether you are on the right track than if you were to take slow, detailed steps and then find out that you were wrong. Therefore, it could make sense to work fast, even if you have a company with years of experience. Obviously, however, individual actions do not pose significant risks to your business.
Execution, execution, execution
You have the money, you have the plan, you have the team. Now you have to take action. There is a saying in business that it's not what you start that matters but what you finish. You may want to keep that in mind when you begin to execute your plan.
It should be noted that finishing something can also mean realizing early on that a particular initiative may not be worth your time. You can finish the initiative by striking it and focusing your energy elsewhere.
Speaking of focus, it's important that you do not lose focus from your core business while trying to create growth. Perhaps one of your growth initiatives lies in the periphery of where you earn your money today. In such cases, it is crucial that you do not neglect your core business while trying to develop it in other areas.
Apart from that, just concentrate on your plan. If you want to make sure to keep the momentum, you may want to create weekly status reports for each initiative, so you're constantly making progress.
Evaluate your growth efforts
Once your business has implemented growth initiatives, you should take some time to evaluate your efforts. It may seem unnecessary if you can clearly tell what has worked and what has not. But even though overall conclusions are sometimes easy to come to, a structured evaluation can be the small investment that ensures you get the most out of the energy you've already invested in creating growth.
Collect the required information
Any good analysis is based on the right information. In this context, it means that you must collect all the relevant data to assess your growth initiatives.
The data can encompass things such as your growth plan and budget, the results and other relevant feedback from employees, customers or collaborators. It gives you a good basis for evaluation.
Once you’ve collected the data, you begin your evaluation. Here are a number of questions you can use as a basis for it:
- How did reality compare to your plans?
- Did you stay within budget?
- Were you up to the task?
- What can you improve on?
- What has your business learned from the process?
Completing the evaluation means it is time to look forward. What steps should you take next, what should you give up on? Are there any other initiatives that you should start working on?
This is your chance to take a look at the work you did preparing your growth plan and see if there are any unused options you might consider trying.
Make sure you use the knowledge you've gained from trying to create growth to drive your business forward in the best possible way.
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