Overcoming the challenges of growing your own business may seem overwhelming at times. Multiple problems can crop up, and it is difficult to find the time or money to start your growth journey.
Recent years have been particularly difficult, with many businesses postponing growth due to the Covid pandemic, Brexit, an energy crisis, high inflation, and supply chain disruptions due to the Russian invasion of Ukraine and other geopolitical issues.
If you are ready to start growing your business in these uncertain economic times, there are a number of tips that can help you avoid mistakes and put you in the best position financially to expand.
Why businesses struggle to grow
One of the main reasons small businesses fail to grow is inadequate cash flow. This means they never have enough liquid assets to make big financial decisions like hiring new workers, expanding their offices or investing in new equipment. Essentially, the business makes enough to keep running at its current size, but its revenue streams do not allow for large investments back into the company.
This does not mean the business can not grow. It just does not have the financial momentum to make it to the next level.
What it takes to grow
If you have a stable business and you are interested in expanding your operations, then your first step is to identify what investments are most likely to provide a good return. This is a crucial first step because businesses can grow in a variety of ways. You want to make sure that your growth is able to sustain itself financially.
Once you know where you want to invest, you can follow the below steps to help you secure the funding you need.
Find a reliable partner
As a business, you need a bank, building society or other lender who is able to provide you with the financing you need. The important thing here is to look for a company that is responsive to your needs and experienced in finding the financing that is right for you.
Any lender can get you a loan, but a great lender will work with you to find the best loan for your particular situation. This is why many people choose to work with brokers. They spend all day every day working to get businesses loans so they understand what each lender can offer as well as the regulations around business lending.
Avoid high interest rates
Interest rates have been raised in an attempt to curb high inflation. But it can push up the cost of financing crucial aspects of a business, impacting profitability and capital structure.
You can overcome this problem by taking advantage of the government’s Recovery Loan Scheme (RLS).
This initiative was originally aimed at helping small businesses deal with the effects of the pandemic. It’s now been extended with a focus on more general support for businesses and get achieve longer terms funding potentially up to 6 years rather than the high rate short term funding on offer in general in the current economic climate
Rethink your business plan
Your business is growing, and your business plan should too. If you are expanding a product line, offering a new service or just increasing capacity, you need to consider how this will affect your current strategy.
Stepping back and thinking objectively about the key elements of your business can help you make better decisions as you move forward. A good and up-to-date business plan can also encourage new business partners or investors.
By taking the time to update your business plan, you are also more likely to identify new opportunities or potential problems. This gives you a head start to plan for these things and take any necessary steps.
Improve your recruitment strategy
As you steadily grow your business, your employees will be one of your most valuable assets. If you are bringing on new employees, current workers will be crucial for training and helping get new hires up to speed quickly.
However, a flawed recruitment strategy can leave a business struggling with high staff turnover, loss of productivity, and a negative impact on reputation and branding.
Attracting the right talent for your business involves:
- Including clear expectations in your job description.
- Offering a competitive salary.
- Ensuring an attractive work environment.
At the interview stage, look for candidates who are:
- Enthusiastic, positive and conscientious.
- Strong communicators.
- Capable of using their initiative.
Manage your business better
Just because you are an expert in your industry does not mean you are a great manager. This is nothing to be ashamed of, but it is something any good businessperson must consider. A growing business means more responsibility and, in many cases, more management duties.
To overcome this problem, you can acquaint yourself with the basics of business management or hire help to take care of aspects such as general admin, bookkeeping, and marketing.
It is also a good idea to look into improving your communication skills. Being a good communicator is an ability that can help you retain talent, win over investors and improve the culture of your company
Avoid over expansion
Trying to expand too quickly can overstretch your business. This can leave you without the resources to complete new work you’ve taken on or result in compromising the quality of goods or services you provide. Both scenarios can severely damage your business reputation.
The best way to avoid any overreach is to make a detailed plan of everything you want to do, along with all the costs. Then you can put together a realistic timetable for achieving each goal.
If you are ready to take your business to the next level, speak to one of the experts at V4B Business Finance. We have helped hundreds of businesses find the funding they need to grow. Fill out our application form, and we will get in touch with you about your options.