Running a business is a cyclical process of investing and reinvesting. While you aim to maintain a positive profit margin, you should also think about planning for the long term. You wouldn’t want your business to stay stagnant as the competition in your market intensifies and new trends come along.
Having a growth mindset enables you to stay for the long haul, allowing you to build a business that grows beyond borders and penetrates unfamiliar markets. The key to that is financing. You can’t think about growing your business if you don’t have enough to bankroll the development of new products or the construction of branches in other locations. With this in mind, let’s look at a few things to consider as you prepare to put together a plan for exponential growth:
1. Assess your financial needs
You wouldn’t want to come up with a plan that doesn’t take into account the problems and issues you’re facing. Without insight into your present financial situation, you won’t be able to narrow down your strategy for seeking additional resources to fuel your business’s growth. For this reason, consider how much money your business is making minus the amount of money that goes towards operational expenses.
Growing your business won’t be possible at the moment when you’re paying too much to keep it afloat. It also matters if you can conduct financial forecasting wherein you gather past and present financial statements and analyze current market trends. This enables you to determine whether your business will stay profitable within the next year or so.
2. Review your business model
Aside from checking your business’s financial situation, you will also need to take a step back and look at your current business model. Focus on the ways it’s making money and assess its strengths and weaknesses. It’s possible that your business model worked well in the first few months of launching but when faced with market disruptions, it becomes a hindrance to growth and innovation.
In most cases, a complicated business model discourages investors and costs more to maintain. If that’s the case, then you might want to consider changing the entire setup. You don’t have to reinvent the wheel. All it takes is to simplify your business without affecting the value that your products and services bring. This opens you up to new windows for attracting growth capital.
3. Know what growth involves
Increasing your business’s profits is the main objective, but you need to double down on tangible goals. That way, you can allocate resources effectively as you invest in things like a quality workforce or high-end manufacturing equipment.
If your main goal is to recruit the best talents, you may need to offer competitive compensation packages and reach out to services like Triton Canada to help conduct accurate criminal record checks. With such insights, you will have a better understanding of how much financing is needed to accomplish your growth goals.
4. List down possible financing sources
Once you know your business is ripe for expansion, you need to know who and where to reach out for growth capital. The most accessible option is to apply for a business loan. There are lenders offering loans that are meant for expansion activities like building a new facility or purchasing high-end equipment. Shop around for loans that match your financial needs, making sure the terms won’t eat into your profit margins.
Aside from loans, you can also reach out to investors who would offer money to fuel your business’s growth in exchange for a stake in the company. This is the case for venture capital firms that focus on businesses with the potential for long-term success. However, be careful when you’re acquiring growth capital from these investors. There’s a good chance that you would be bought out of the business as it enters its peak.
5. Capitalize on your network
Your business won’t grow past its threshold through capital funding alone. Expansion also relies heavily on how well you can forge partnerships and connections across markets and borders. If part of your growth strategy is to build a presence in another country, then it pays to have growth partners on site who can help you look for local investors who can secure everything you need to get started.
With this in mind, don’t shy away from any opportunity to grow your professional network. Take part in live or online events such as trade shows and conferences where you can introduce your brand and the profitable potential of the products or services it sells. From there, you might as well open up doors leading to grants, investment proposals, and loans with favorable terms.
6. Monitor and assess your business’s trajectory
Once you have put your growth strategy into motion, it’s only a matter of determining whether you’re making the most out of the time and resources you put into your game plan. Tracking your business’s growth is critical to knowing whether your activities yield actual returns or lead you toward massive liabilities.
Consider setting up key performance indicators that allow you to quantify growth. You may want to focus on how well your new branch is attracting new customers. It also helps if you can monitor operational expenses and even social media engagement rates. These indicators will help you analyze your business’s tolerance for growth and make adjustments that will keep your business on the right track.
Endnote
Financing your business’s growth is a process you must undergo if you want to remain a major player in your sector. Consider these tips and give your company the momentum it needs to outgrow the competition!