Achieving SMB(small-to-medium businesses) Long Term Growth – Essentials Checklist
Almost all ideas, plans and efforts when leading a young business are unified in one single goal – achieving growth. Every business, no matter how big, strives to get bigger, but small-to-medium businesses are hungrier for “proving what they are made of”. All SMBs have growth potential. This potential is larger with small companies, but it has to be managed properly and carefully, in order to avoid many traps on the road towards success.
Still, many small and medium companies fail to grow (in terms of revenue and profitability), mostly because they do not manage to create a good growth strategy which has to be backed up with a strong execution infrastructure (which is also missing). These are the two major reasons why SMBs fail to grow.
However, the chances for success can certainly be improved (if not, then this article would be non-existent, and you would not be here, right?). Managers can clear the way for their business’ to grow by building a strong execution framework and devising, testing, and implementing clear growth strategies.
Create realistic plans
Your long-term plans need to be clear and attainable. If you present your plans that are unrealistic to potential investors, you will probably be turned down for receiving funds for your business. This is actually where many young entrepreneurs make a mistake, by making too ambitious plans whose realization seems too difficult or even impossible. Do not create plans only for collecting funds.
What does being “realistic” means when writing a business plan? It means avoiding to be too aggressive or blindly optimistic. A well-written business plan is specific (with all the strategies and methods that should be used being included in it), easy to read (without any unnecessary elaborations and source that are hard to understand), and realistic (all the plans included in it should be achievable). Pay attention to realizing certain short-term plans that can give your business strong boost. How can this be good for long term growth? Think of your business as a plane that is about to take off. You need a lot of energy in getting airborne, but after that you just have to glide.
Create a proper management network
This is also where you have to play your cards smart, due to the fact that the budget of small and medium businesses is limited. Hiring people to run separate business units might be impossible in that case. Try hiring less experienced managers and provide them proper training instead. Hiring top industry experts would be much more expensive than outsourcing these services or hiring a trainee for a managerial position. Also, after about a year or two when trainees develop into expert managers, they will be more loyal to you and your company.
Having more than one cash source is invaluable to your business
No matter what the size of a company, having more cash sources on which one can rely on at any time is an invaluable asset. One way to start a business is crowdfunding, which is usually free. It is also based on customer recognition, so you would probably not have problems with selling your products. Raise money from your friends and family, attract investors, pledge some of your future earnings, or take small business loans.
The importance of debt recovery
As we said earlier, SMBs have a limited budget, thus having the necessary liquidity is of great importance. If you are having troubles collecting money owed to you from debtors, consider using all means available before carrying it to the court of law. Remind the debtor of his late payment by emails, phone calls, and sending reminder bills. Try understanding the difficulty of the situation, offer discounts, and negotiate (this may result in prolonged deadlines). Terminate the business relationship until the debt is collected, or hire a good debt collection agency that knows its way around debt collecting issues.
During your company’s growth process, you and your employees will face many challenges. Provide them proper training and education, make realistic plans, and be prepared to adapt to the business environment and to change your marketing strategies on the go.
Latest posts by John Stone (see all)
- Achieving small-to-medium businesses Long Term Growth – Essential Checklist - May 17, 2016
- The Risks of Starting a New Business – Things You Should Know - April 19, 2016
- The Entrepreneurial Mindset and its Importance for Business Success - March 12, 2016