Many small businesses are the result of a good idea and hard work and for a considerable time often start life as a ‘one-man (or woman) band’. It’s a classic story; one in which the owner is everything from CEO to cleaner in the early days.
Of course, for some businesses, this model can be very successful. At Ultimate Finance we work with dozens of sole traders who are keeping their customers happy, turning over a good profit and are more than happy to be going it alone.
Growing in confidence
However, for many small business owners, growth is the logical next step but it’s one that can seem pretty intimidating.
One of our customers recently likened running a small business to looking after a baby; you give it your full attention, tend to its every need and love it beyond anything. But often, you’re so caught up in the daily routine that it’s hard to see the bigger picture; this can cause owners to miss the signs that it’s time to think about expanding the business.
Is your business at its ‘tipping point’?
It’s widely used but I like the term “tipping point” for those moments when a business is ready for the next stage in its development. The challenge for business owners is to identify what these points are and be ready to take full advantage of them when they occur.
Here are five common tipping points for small businesses.
- Your balance sheet is healthy but you’re working flat out
This is very common. Your business is doing well; its bank balance is healthy, but you’ve not got a spare moment to enjoy it. Clearly, it’s time for a change.
- You sell or offer one product or service and your customers are asking you for others
You sell one product but it becomes apparent that opportunity lies elsewhere. Amazon started as an online bookstore in 1995 but soon realised it would prosper by branching out and investing in more varied stock.
- Your order book is so healthy it is giving you nightmares
Again, this is very common. What should be a happy time in the business is in fact fraught with challenge and stress because you’re not able to keep up with the demand for what you do.
- You have twenty different job titles
You’re CEO and CFO. But you’re also the Head of Marketing and manage the bookkeeping. You’re amazing but you can’t be all these things all of the time.
- You’re having to turn down work
You’re spending your time turning down work that is offered to you. This is losing you potential orders but it’s also losing you customers.
Pushing past your tipping point
If you can relate to these tipping points, then the time has come to look at your business strategy and plan for expansion. This can be a terrifying prospect and it may seem like a step too far but consider this – every successful entrepreneur was in your situation at one point in time. The wisest thing to do is talk to people who have been through what you’re going through to understand the inner workings of expanding a business. This can be done at business networking events, through your own contacts or by partnering with business consultants. Experience is out there ready to be shared.
Equally as important is managing cashflow during such periods of change. Expanding your business will have an impact financially as it involves heavy investment – whether it’s producing more products, recruiting more employees or opening a new location. Such costs can be offset with good funding, ensuring that expanding your business doesn’t negatively impact the bottom line and increase risk rather than opportunities.
At Ultimate Finance we pride ourselves on providing the right finance options at the right time so if you’re thinking that it’s time to expand your business then please give us a call.