Positive Signs That Your Small Business Is Ready For Growth
According to a report by the Small Business Administration (SBA) Office of Advocacy, 4 out of 5 small businesses survive the first year. Unfortunately, only 1 in 3 businesses can reach the 10-year mark.
Starting and maintaining a small business is a fulfilling but challenging endeavor. At the first sign of stability, some business owners choose to be satisfied with the success they are getting. For those who dream of business growth and further success, things will only get challenging.
Growing your company requires patience, research, and finding the right signs that’ll help you develop a good business strategy. In this article, we’ll discuss some of the important indicators you need to observe to know if your business is ready to take its next great leap.
Previous Goals Have Been Met
Take the time to go over your original business plan and all the other changes you’ve made with your company. Were you able to meet your goals? There are several ways to help you measure your company’s performance, such as:
- Checking your financial statements: Conduct a financial analysis of your business. This entails looking over the income statement, balance sheet, and cash flow. By checking these statements, you’ll see how profitable your business is and how financially ready it is to take on big risks.
- Checking Customer Satisfaction: Conduct surveys or start reading reviews. It’s important to know if your customers are satisfied with products and services. If not, they probably won’t do business with you again. They may even convince others to do the same. This is dangerous, especially if the business is currently under a transition period. By understanding their needs, your company can earn loyal customers, and your improved products may attract new ones.
- Conducting Performance Reviews: Your employees are an essential part of your company. Without them, running and expanding your business will be hard. Make sure to check on their current performance and morale to ensure they are ready for the transition ahead. This is also a good opportunity to find ways to utilize their talents better and increase workplace productivity.
If you found some goals you haven’t met, it’s best to focus on them first. If you have met them all, this should give you and your team the confidence to meet new expansion objectives.
Customer Demand Is Consistently High
There may come a time when you simply can’t keep up with the demand. Customers may be asking you about new locations or products. You may find yourself ordering more stocks than in the previous months, or you’ve got long waitlists for your services. These are indicators that your business is in an upswing.
However, demand for your products and services must be consistent. A month of successful sales is not enough. You must have a consistent demand for your business for at least a year, with repeat customers willing to stay with you.
Study your sales numbers and analytics. If you have proof of sustained demand, it’s a good time to start implementing changes for growth.
Your Business Has Been Profitable For The Past Few Years
Having a profitable business is good, but simply being profitable one time may not be enough if you are looking to expand your business. You must have a good history of being profitable.
The longer your business has been turning a profit, the better. Having a good financial foundation is key to surviving the growth period of your business. There may be unforeseen costs and investments that may not always guarantee immediate returns.
Some experts say three years of profitability is the minimum, but there’s no hard number. You and your team must crunch the numbers and find evidence that your company’s profitability will continue.
The Business Can Run On Its Own
Planning your company’s expansion may draw your attention away from your usual duties. Whenever you’re thinking of growing your business, it’s important to know if your company can still run like clockwork even without you.
A company should have developed and implemented various systems of handling operations before expanding. Try to systematize and streamline your company’s processes. You and your team can create a process manual about things like collection procedures and meeting potential clients.
This is also a good time to learn if you have a good team on board. If your team knows their roles, shares your vision, and has clear lines of communication with employees, then you already have a good foundation for expansion.
You No Longer Have The Skills To Maintain The Business
If you find yourself frequently dealing with responsibilities that are no longer your specialty, it could be a sign that it’s time to grow your business. You may be a brilliant contractor, but you may not always know how to do bookkeeping or customer service. It’s a natural part of a company’s life cycle.
The increase in demand may have forced you and your team to handle other duties to keep up. This could affect your company’s productivity and efficiency. In situations like these, it’s better to hire a professional or even outsource some of the responsibilities to ease your team’s burden and start focusing on growing the business.
If you notice some of these signs in your own business, make sure not to get caught up in the excitement and push your business too soon. It takes time, capital, research, and hard work to grow your business properly. By considering your options, formulating strategies, and creating a solid financial foundation, your business will be on its way to success.
Quadrant Advisory has a successful track record of helping large companies, startups, non-profits, and others optimize accounting and operational systems to support growth initiatives.
If you plan to expand your business, contact us today for a free consultation about how our business strategy services can help your company grow.