Growing your business

If you are considering your next steps, take the time to review your options and the market. Make sure you understand your business as it is today and have a plan. If you’ve never developed a business plan, or haven’t reviewed it regularly, now is the time to do it. If you need help, download our Business Plan template from thesbhub.com.au.  

When reviewing your business, consider undertaking a SWOT analysis.

SWOT analysis - SWOT stands for strengths, weaknesses, opportunities, and threats and it’s a framework for analyzing your business.

Strengths and weaknesses represent internal factors and opportunities and threats represent external factors.

Strengths – Strengths are the internal factors of your business (tangible and non-tangible) that you know work well. These can include particular staff skills, products and services. Look for any area of your business that can’t be matched by your competitors.

Weaknesses – Once again you’re looking at internal factors. These can be gaps in your product line or service offerings, skills that your staff members don’t have, or even a lack of capital. Look for any area within your business that will adversely impact on your ability to expand.

Opportunities – These represent the external factors. An opportunity can be areas where the business could expand, capitalise on an existing gap in the market, or develop a new offering to meet a future demand.

Threats – Like opportunities, threats are external to your business. Threats are factors in the market that may have an adverse impact on growth, such as a new competitor or changes in customer behaviour.

As you conduct your SWOT analysis, work through the facts about each area of your business, the implications (both positive and negative) and your strategy to deal with them.

There are many ways to grow a business. If you’ve completed your analysis you may have found several opportunities available, but it’s worth examining the various options.

Developing new products or services for existing customers - Ideally, the new offering should have some synergy with your existing business. For example, a car service centre may decide to offer a retail tyre service, which in the right circumstances will offer real benefits to customers.

Greater penetration of existing markets with your existing products or services - The reasons for lack of market penetration can be many and varied. For example, it may be that manufacturing and stock levels need increasing or that the price of the product needs adjusting to be more competitive.

Entering new markets with existing products or services - This relies on expanding your distribution channels, and unless your business can be managed remotely, this requires careful consideration of staff in the new market.

Developing new products or services for new markets - This approach to growth involves a deep understanding of the new market. It may help if the new offering has some synergy with your existing strengths. This can include both staff skills and manufacturing equipment.

Franchising - You only have to look at some of the worlds biggest brands to see how franchising can work. If you have a unique proposition that may suit a franchise model, seek advice from the Franchise Council of Australia.

Merging with another business - A successful merger may quickly lift your market share, deliver cost savings increase profits.

Buying a new business - This is certainly another way to expand, particularly if the new business has a strategic fit with your existing business. You may even choose to buy out a supplier or customer.

You have a number of options to finance your expansion and we can help. Why not book an appointment with your local Small Business Specialist for an A-Z Review^® to help tailor a business banking solution before you move ahead.

Your options to finance the expansion include:

Internal cash reserves – If the business has the cash reserves to fund the expansion then this may be the most cost-effective method. However, make sure you don’t leave your business short.

Loans – Obtaining finance from a financial institution such as ANZ is one of the most common ways to finance business growth.

Releasing equity– Taking on partners and releasing equity in a business you’ve built may not be an easy decision. Make sure you can work with your new partners and be sure not to undersell your equity. You should seek professional advice.

Venture capital – You surrender a proportion of the ownership of your business in return for funding. But when raising venture capital, it’s vital to understand exactly how much of the business you’re surrendering and what level of influence the investors will have on the day-to-day running of the business.