It’s no secret that New Zealand is a nation built on the back of small businesses - there are hundreds of thousands of them. This of course means there’s great diversity, not just in the types of businesses, but also the people running them and their motivations for being in business. Some will be in it for the lifestyle, content with small scale operations, while others will have been geared for growth from the outset. How do you know if growth makes sense for your business?
Is my business ready for growth?
One of the things we ask our BNZ Small Business customers when they come to see us is, “have you got a plan?” It’s a simple, yet vitally important question because any plan requires some strategic thinking about your business. This kind of objective thinking is all too easily neglected when you’re running a business, but is an important part of deciding whether it’s the right time for growth.
Things to consider vary, and some of the pointers will be more obvious than others. For instance, if you find demand for your service is greater than you can supply, that’s a good sign your business is ready to grow. Likewise, how is your cash flow situation? If you’re struggling to pay the bills, it may be a time for consolidation rather than growth. Others signs will be more subtle, for instance, has your business successfully weathered any recent economic ups and downs? Do you want to spend more time in the business or less? Your own motivation for being in business is a good indicator of whether you’re ready to take on the challenges of driving growth or not.
What should a business have in place before growing?
If all the signs point to good growth potential, the next step is to make sure the business is in good shape. This means sorting out cash flow problems, streamlining processes, hiring the right staff and putting some serious thought into your forecasts.
Cash flow can be improved through smart use of the latest technology (mobile payment devices like PayClip being a good example) that make it easier for people to pay you, and lending tools such as BNZ Asset Finance.
How do I prepare for growth?
With a solid foundation, it’s time to look ahead. Ask yourself how large you want the business to grow and how fast. Financial restraints will likely dictate your ambitions here, so be realistic with your goals then break it down into smaller, more achievable goals. That way, when you approach potential investors or your bank, they’ll be more likely to want to help if they can see clearly your goals and your plan to get there.
With growth comes change. One of the biggest changes for many small business owners is learning to hand over responsibility of the day to day running of the business in order to focus on growing it. I’m a big fan of building resilience, both personally and in your business, and when you’re stepping away from the reins of your business, resilience is essential.
Building resilience doesn’t just happen, of course, and that’s where outside assistance can really help. Programs run by business incubators such as the Icehouse are specifically designed to help owners develop these skills while also building a network of skilled supporters and contacts.
Besides upskilling yourself, these networks of people with their fresh outlook can often assist in the final step of the growth process; identifying new opportunities for growth. The more people you talk to, the better. But if you’re looking for a place to start, I’ve found over the years that when it comes to identifying new growth opportunities the best place to look is to your customers. If you know your customer inside out you’ll be able to create new products better suited to their needs and refine and reinvigorate those you already have. So take the time to examine exactly what it is they want from you, and you’ll be well on your way.
Are you ready to take on the challenge? Growing your business often means you need to invest in additional machinery and equipment. Check out BNZ's loans and financing options to help set yourself up for success.