Free small business advice - help planning for new business growth
02 Apr 2021
Free Small Business Advice
By Kieran Perry - Business Coach
The life expectancy of a small business is forever changing. Every year, hundreds of businesses reach the point of no return financially. About 20% to 25% never last the first year of trading and an additional 19% of businesses close before the end of their second year of trading, with 10% more going out of business during the third year and less than 20% of them are still in business after their 10th year.
So why do so many small businesses fail…? there are a number of reasons including poor financial management, internal problems, selling difficulty's or inferior products or services - but there is at least one common thread running through all these reasons is lack of proper planning and lack of considering all the factors before your develop.
What a small business should know about planning for business growth and the future.
Effective planning is a key management function whether a business is just starting out or is in a growth stage. Success brings growth and growth means change.
It is of course difficult to consider energetic planning when success is already a reality, and complacency is the natural human result - no one welcomes change, many people dread change so adjusting to new patterns of conduct new and different ways of doing things in business threatens the feeling of security.
But anticipating and preparing for change now by planning for tomorrow's needs today is every bit a necessity.
Why do I need a business advisor
As a business owner or executive you can’t afford to plan on the precarious basis that you can expect to find the same economy, the same suppliers, the same customers, and the same competitors tomorrow that you have today. You should not assume that your activities which meet today's needs will meet tomorrow's needs in business to. Yet it is apparently a very human trait shared by some businesspeople, to assume that the future will resemble the present.
This is mere projection of course anyone can continue a curve on a chart to Infinity the skill comes from predicting what sources are likely to change its shape this is planning……….
Responsibility for planning
Almost everyone who works in a business and has a management role will do a certain amount of thinking about the future in their company and how he or she can help bring this future about. Many business owners have had the unfortunate experience of seeing their most carefully laid plans go up in smoke because of certain changes that could not have been anticipated or where not planned for.
Planning for the future
- Planning is the process by which profitable growth is sought and is attained in a changing and uncertain world.
- It is one of managements prime responsibilities since a company either grows or declines there is no in between position.
So, the everyday problem is putting the planning process into a workable business plan and knowing how one goes about this, there are four major steps in planning for growth or expansion.
- Gathering of all permanent statistics and data
- Close analysis of these facts and figures
- Setting your objective as to extent size type cost an estimated return.
- Step by step planning of the overall operation putting it into a workable plan.
How to grow your business
Growth of a business can take two forms, an increase in the sale of its present product lines or services or entry into new markets - whether related to present activities of the company or not.
In setting a company’s growth plan over several months or years, it is a rare enterprise indeed that can assume it will be serving exactly the same market with the same type of product at the end of the period . Planning must therefore try to decide what to improve or change in the current market / or industry and what that will mean to its present sales and how the company should react to these possible changes.
Businesses exist to serve customer’s needs, the enterprise which serves them best will always be the profitable one.
Growth in new fields
Expansion into new markets of activity is much more complex in planning for growth in present sales clients or known markets. Uncertainties always exist when entering new situations. But the fact remains that after a company has reached such a size that its share of the market can no longer rapidly be increased, so good management must consider growth through new opportunities or markets.
There are two possible approaches to new business growth one is through the company's own efforts based on new technologies and developments, and the other is by purchasing another company outright, each of these growth options has its own attractive features one advantage of entering a market on your own by self-generated entry, is this can be done with a modest scale of investment and manpower is required in the initial stages since most of the work can be handled within the framework of the existing company.
Joint ventures
Joint ventures are a modified form of acquisition that are often favoured as a method of reducing the risks in entering a new market or field, if two companies can pull their complementary strengths, money, and resources, this normally results in a stronger unit, rather than if either company had gone it alone, but it is essential that each partner be able to contribute and have a control, as unbalanced joint ventures can collapse if each party are not happy long term.
Conclusion
Evaluating the plan
When the business growth plan has been agreed by all concerned and is ready to be put into action, don’t worry if some last minute changes may have to be made because of certain unexpected events or actions – keep flexible. Review and prepare sales and financial data for analysis monthly to help base your decisions on facts not gut feelings going forward.
Long range planning is as a management aid and valuable as the results may be that are obtained from using this technique, there is no certainty in the business world, no planning method can 100% forecast the future and no decision for that action can be expected to achieve every aimed for result but there is one thing of which we can also be certain that the long range business plan becomes a central part of any businesses management thinking and if with increasing frequency the predictions and proposed objectives of the plan become reality then the programme is obviously a success and the proof of that success will be in the company's growth and profitability.
Review your plan regularly , Keep Flexible, and don't be afraid to change the plan if it is not working - but back up any new decisions with your current data.
My name is Kieran Perry, I am an independent business advisor and sales expert, offering business coaching and sales mentoring. I can help you successfully start, progress or develop your business.
His services include independent business advice, business coaching, sales training, executive mentoring and management consultancy to business owners, directors, start-ups and individuals across the UK and online. To read more on his business advice view his Blog for more business strategies, or see his Pricing, or Reviews . Follow Kieran on Instagram.