7 Key Considerations for Business Growth

Relevant For:

Small-to-medium business owners looking to grow their business.

Key Points:

  • Visionary Business Plan: Regularly update to guide decisions and avoid resource wastage.
  • Compliance Planning: Prepare for increased compliance responsibilities with growth.
  • Resource Planning: Anticipate all growth-related resource needs, including capital and management.
  • Staff Management: Implement strong HR policies and development programs.
  • Finance Review: Regularly compare financing options beyond traditional methods.
  • Financial Reporting: Maintain up-to-date records for informed decision-making.
  • Succession Planning: Create wealth strategies and formal succession plans.

Full Article:

Growing a business is a significant decision that many owners face.

The drive for growth often stems from the desire for higher profits and increased business value upon sale. However, as a business expands, the owner’s role must evolve, with more responsibilities delegated to others.

A well-managed business that doesn’t rely solely on the owner can be significantly more valuable.

Key Considerations for Business Growth:
  1. Developing a Business Plan: Crafting a dynamic business plan is essential. This plan should outline the company’s vision and provide a roadmap to achieve it. Regularly update the plan to reflect new information and ensure it guides all business decisions, preventing resource wastage.
  2. Managing Compliance Obligations: Growth brings increased compliance responsibilities. Prepare for changes such as shorter tax payment deadlines, payroll tax, and occupational health and safety requirements. Planning ahead for these changes is crucial.
  3. Planning for Growth: Anticipate the resources needed for growth, including working capital, premises, management time, and systems capacity. Effective planning goes beyond budgeting for extra sales staff to cover all aspects of business expansion.
  4. Looking After Staff: Staff are a key asset. Implement robust HR policies and procedures, including development programs, to manage them effectively. Consider external consultants if a full-time HR person isn’t feasible.
  5. Reviewing Financing Options: Regularly assess and compare financing options to ensure competitiveness. Move beyond traditional business overdrafts to explore alternatives like leasing, debtor finance, and rolling bill lines, which may offer more favourable terms.
  6. Regular Financial Reporting: Timely and accurate financial reporting is vital. It enables informed decision-making and quick identification of issues. Modern accounting packages offer excellent reporting options, so commit to regular data processing to maintain up-to-date records.
  7. Succession & Estate Planning: Develop wealth creation strategies within and outside the business. Have a formal succession plan for the transfer of business ownership, addressing structuring, tax implications, timing, and family roles.

By addressing these key areas, business owners can effectively manage growth, enhancing their business’s value and sustainability.