Growing Smart

Some businesses grow with little effort on the part fo their managers, simply by taking orders, delivering products and collecting payments from an ever-expanding base of customers.

Other businesses grow because the owners made a strategic decision to do so.  This may involve finding additional financing to expand product offerings, increasing production capability, extending geographic reach or by tapping into new markets.

The biggest challenge confronting business owners is choosing the right time and manner in which to grow your business.

There are many reasons why business owners choose to pursue growth:

• Increasing profits
• Taking on new challenges
• Achieving economies of scale
• Getting volume discounts on materials
• Enhancing the company’s (and the owner’s) status
• Acquiring an more diverse customer base
• Targeting new customer segments and
• Taking advantage of new technologies to open new markets

The two questions each business owner must ask is:  “Should I and how should I grow this business?”

Once these questions are answered, the real work begins.

There are many considerations that have to be addressed.  Among these are:

• Marketing:
  • Is there a market and customers to support the expansion?
  • Just how large is this segment?
  • How can they be reached and what message will resonate with them?
  • How can the business differentiate itself from thecompetition? and
  • What will the competition do to counter this expansion?
• Finances:
  • How much is this going to cost?
  • How long will it take to make a profit?
  • Is there sufficient working capital to fund the business me during this expansion?
  • Will new customers pay in a timely manner? And
  • How will the competition react?