Afraid to raise your prices? Don’t be – and here’s why.

When we first start a business, the biggest question we often think is, “what should I charge?” We tend to start out where we’re comfortable and confident people will buy.  After a while we may find that we’re making sales easily.  That’s an indication to consider raising prices.  If you also find that you’re working at capacity and losing money, that’s also an indication your pricing (as well as your operations) needs to be reviewed.

What stops most business owners from raising the bar? Fear. Many business owners think that if they raise their prices, it will scare-off their customers and they’ll look to your competitors. Feeling nervous about the adjustment is normal, but consider that in some circumstances, price implies value.  You wouldn’t go to a discount doctor, would you?  You also may find that you do lose a few customers, but if you’re making more profit from the others, and new ones, you may be better off in the long run.

In an ideal world, your business should raise their prices every year. You Should evaluate your pricing annually, taking into account new capabilities your firm has developed, your overhead costs, and the general economy.

Look at media giant Netflix. The company originally had a streaming combo-plan for $10 per month. Soon after, they decided to raise their prices to $16 – that’s a 60% increase! Customers weren’t happy and unfortunately took to social media to complain (Kuadey, 2011). I’m sure there was a strategy behind this – perhaps one big increase instead of a bunch of little ones but do try to avoid this with your business.  If you do want to raise your prices this much, try it with new customers.

Your pricing sets the tone of the kind of company you want to be and the type of customers you are looking to have. For instance, if you are known for your low-cost pricing – customers typically won’t expect high-end customer service. If you have higher-pricing – customers will expect all the bells and whistles for what they’re paying.

Here are a few reasons to help make your decisions easier:

  • Growth – You’ll want to grow your business, not just gain a ton of new customers. It’s actually 6-7x more expensive to gain a new customer, than it is to keep a current one. (Source: White House Office of Consumer Affairs).
  • Cleaning House – Having the right customers is what matters most to a business. If you raise your prices, your low-quality customers will leave and go elsewhere – leaving those high-quality customers who see the value in what you charge.
  • Quality over Quantity – Your business’s increase in costs are not the same as increasing in price. Most of the revenue you get from increasing your prices goes toward increasing profits.
  • Competition – When figuring out where your new pricing should be, look at your competition. You may not want to be the lowest, or the highest, but show your customers the quality and service they can get.
  • Statement – Most consumers have heard the saying, “you get what you pay for.” If your services are too low, many buyers will assume there’s something wrong with it. Also, other competitors may follow suit and lower their prices, and then you’re just in a race to the bottom.
  • Focus – By raising your pricing, you need to look at the service as a whole. Will you also need to improve your quality of service? What other high-value items can you provide to your customers? By focusing on your value will help show your customers that you’re willing to focus on the overall experience in the long-run.

 

Each year, be sure to look at your pricing and your business’ financial health. Not increasing pricing when needed, can result in loss of cash flow when your business is ready to grow.

Have questions about pricing? Reach out to me at judi.otton@growth-cast.com.

 

Tips To Keep Your Books Current & On-Point

According to a small business administration study, over 28% of businesses go bankrupt due to problems with the financial structure of the company, and in many cases this could have been avoided.[1]

Understanding your accounting reports is essential in order to stay on top of business so you can manage your finances and make informed decisions based on facts.

These tips will help keep your books current and your habits on point.

 

The necessity of good accounting practices for small businesses

  • Not having adequate accounting procedures in place is akin to financial suicide and could easily cost over $100,000. The average time lost by having to fix and implement a system is 200 hours or more.

 

Poor Record Keeping Has Consequences

  • Overlooked/unpaid expenses.
  • Penalties incurred for filing taxes late.
  • Mingling of assets (savings vs. checking, personal vs. business, etc.)
  • Difficulty paying bills and employees.

 

Your Cash Flow

The Cash Flow Cycle – Cash Flow is a complex, vital process and requires knowledge of a company’s financial accounting systems general management of financial information, and proper inventory control.

 

A Basic Formula Covers –

  • Accounts Payable – liabilities, money you owe
  • Net Income (the bottom line) – revenues, expenses, net income
  • Accounts Receivable – assets, money you receive

 

What Documentation Is Needed?

Every Business has financials that evaluate the health of their business. It’s important to take a look at your Profit and Loss Statement, Balance Sheet, and Cash Flow Statement.

 

Reading The Statements

Profit and Loss Statement – Show net profit. Major components:

  • Revenue
  • Cost of goods sold
  • Gross profit
  • Expenses
  • Net profit

 

There are two basic equations:

  • Revenue – Cost of Goods Sold = Gross Profits
  • Gross Profit – Expenses = Net Profit

 

Balance Sheet – It’s an overall picture of where your company stands. It includes:

  • Assets – cash, stocks, accounts receivable, inventory, equipment, vehicles.
  • Liabilities – credit card balances, taxes, accounts payable, accrued payroll, loan repayments.
  • Equity – retained earnings, common stock

 

Cash Flow Statement – Analyzes cash generated and used for a specific period. It includes:

  • Operating activities
  • Investing activities
  • Financing activities
  • Supplemental information

 

Sales Forecast

Helps eliminate future earnings (typically 1-3 years) and informs your sales strategy.

 

Projected Annual Sales:

Total Revenue To-Date + Run Date x Remaining Number of Sales Periods

 

Projected Monthly Sales:

Actual Monthly Sales From The Same Time Last Year / Last Years Remaining Sales x Run Date x Remaining Number of Sales Periods

 

Historical Sales:

Company Revenue To-Date / Number Of Sales Periods x Info On If Product Services Have Changed

 

Business Ratios

Financial tools used by financial analysts, investors, and bankers to determine your financial health include different types of standard business ratios:

 

Main Ratios:

  • Total Debt to Total Assets – Shows your percentage of assets financed with debt.
  • Pre-Tax Return on Net Worth – Shows the shareholder earnings before taxes.
  • Pre-Tax Return on Assets – Shows how the company manages and allocates resources.

 

Other Ratios:

  • Net profit margin
  • Return on equity
  • Accounts receivable turnover
  • Assets to sales
  • Current debt/Total assets

 

Finding Someone to Help (Like Me!)

If you’re spending too much time on your business’ financials or you don’t fully understand what you’re looking at, it may be time to hire a professional. It’s still vital to have basic accounting knowledge, but you’ll save yourself time and money by hiring someone who knows what they’re doing – again, like me.

 

Good accounting is crucial to the growth and longevity of your business. Over time, it will help you create and manage budgets, forecast future revenue, track expenses and look at the overall health of your business. Email me to help go over any of these statements or equations – I’m here to help!

[1] Making a Market Forecast Estimate, Bplans

Creating a Business Budget is Just About as Important as the Business Itself!

Think about it – when drawing out a plan of action for your business, you can minimize any unexpected cash flow issues, control spending, inform decisions in other departments, assist with financing applications and reduce overall risk. Here are 12 steps you can take right now to create a business budget.

  1. Research Costs – Why? No one wants to pay more than they really have to.
  • Oversite costs to avoid underestimating expenditures.
  • Marketing costs are notoriously easy to underestimate.
  • For new businesses, include start-up costs.
  • Variable costs generally correlate with sales.

Fixed costs to include:

  • Rent
  • Utilities
  • Phone/Internet
  • Accountancy
  • Legal Fees
  • Technology
  • Advertising & Marketing
  • Salaries

Variable costs to include:

  • Costs of goods sold
  • Labor costs

 

  1. Project Revenues
    • Forecast revenue
    • Use conservative revenue estimates
    • Use previous years’ figures as a starting point

 

  1. Figure Out Gross Profit Margins –
    • List all costs of goods sold
    • Subtract costs from overall sales revenue
    • Consider entire business vs individual departments

 

  1. Create a 12-Month Cashflow Projection
    • Allow for payment terms – e.g. 30 days
    • Allow for payment method – credit agreements incur expenses
    • Understand your opening balance & how this affects cashflow

 

  1. Adjust For Unreliable Payers
    • Allow for late payments in revenue column
    • Allow for bad debt
    • Create business policies to deal with late payment

 

  1. Adjust For Seasonality
    • Research seasonal demand for your industry thoroughly
    • Create savings at peak periods to cover quiet months
    • Allow for temporary staff is required to meet demand
    • Allow for increased production costs at peak time

 

  1. Adjust For Economic & Industry Trends
    • Consider general industry growth
    • Consider wider economic growth
    • Consult forecasts from reliable industry experts

 

  1. Decide How To Spend
    • Fixed rate energy plans help forecasting
    • Decide whether to buy or lease technology, vehicles, etc.
    • Decide whether to buy new or used products
    • Decide whether to buy on finance or outright

 

  1. Discuss Expenditure With Department Heads
    • Project one-off expenses
    • Agree necessary spending
    • Create targets to incentivize performance

 

  1. Prioritize Investment
    • Decide where to assign profits over forecasted levels
    • Consult key management and department heads
    • Discount non-essential expenses
    • Prioritize projects over individual costs

 

  1. Create A Contingency Plan
    • Conduct a risk analysis
    • Plan for financial underperformance and overperformance (which can bring it’s own set of challenges)
    • Consider impact of each option on business performance
    • Minimize loss in business-critical areas

 

  1. Plan Regular Budget Reviews
    • Quarterly budget reviews allow flexibility
    • Be reactive to over/underperformance
    • Adjust figures accordingly
    • Speak to your accountant or business consultant before making big decisions

 

Along the way of creating this budget, feel free to reach out to me with any questions. Each business is individual and unique, as should their plan. Contact us here for more information: CONTACT US HERE

8 Business Challenges To Overcome

Growing your dream company can have some challenges along the way. With the rate that companies go out of business and fail, here are 8 challenges to consider, along with advice on how you can avert disaster before it strikes.

  1. Starting for the Wrong Reason – According to Forbes, more than 500,000 business are started each month – and many for the wrong reason. If you start for the right reasons, such as having a positive mindset that keeps you going no matter what. Some reasons not to start a business is if you think you’ll automatically make millions, or you just want control of something.
  2. Insufficient Capital – Starting a business without any capital is almost a death-knell. Most business owners underestimate the initial investment and ongoing expenses it takes, failing to manage proper cash flow. Protecting your capital can give you a good buffer for the ebbs and flow in your business.
  3. Improper Planning – Lack of planning is another reason many businesses fail and go out of business. Create a business plan and review annually. Regardless of length – planning is critical.
  4. Poor Management & Leadership – Effective management and leadership skills are essential to building success – lack of either can lead to confusion and conflict within the business. Make it a priority to acquire the skills you need to strengthen areas where you are weak.
  5. Expanding Too Quickly – Too often a company can experience bankruptcy as a result of expanding too quickly. Make sure you research and analyze what you’ll need for new employees, facilities and systems and make sure you can manage it.
  6. Failure To Advertise and Market – Many companies go out of business purely because the owner failed to promote and market. In 2016, nearly half of companies did not have a website (Forbes, 2016). Make sure your website is updated and can be easily navigated, set up social profiles and social networks, start an email newsletter and advertise on google, or wherever your target audience is found.
  7. Lack of Differentiation – Unique Value Propositions, described the qualities, characteristics, products or services that differentiate a business from its competitors. Once you understand your UVP, it will make it easier to communicate with your clients and employees.
  8. Unwillingness to Delegate – Business owners can be their own worst enemies, in that they seek to do everything themselves. Learn to delegate work to others while concentrating on the tasks that contribute to the growth of the company.

To learn more business tips, visit the rest of our resources and blogs.

Cash Flow Problems? Here Are Some Alternatives

When you’re suffering with cash flow problems and consider alternative finance for your business, there are a few options available. It mostly depends on what the money is needed for, the size, type and life stage of your company,  your (and your company’s) credit rating, and how much you need. Do you know which form of alternative business finance is right for you?

Business Loan –

A quick business loan could help when you need:

       A flexible and quick solution that can be repaid in convenient, fixed installments.

       A cash injection to:

o   Buy new equipment

o   Buy new machinery

o   Buy company vehicles

o   Fund a marketing campaign

o   Fund seasonal fluctuations in trade

Certain quick-loan companies can provide different amounts for different needs, offering fixed rates and flexible loan terms.   Be careful here – some online lenders are not so scrupulous.  You’ll do better with a local banker you can trust.

Peer to peer lending –

Peer to peer lending could help when you:

       Need to fund a specific project

       Have more time on your side – you can’t get money in your bank within 24 hours

       Are not worries about flexibility – more people are involved and terms are rigid in terms of extending

       Have been in business for at least 2 years

If you are suffering cash flow problems, peer to peer lending may incur higher interest rates.

Asset-based lending –

Asset-based lending could help when you:

       Can fund expansion based on your current assets

       Need to grow your current business

       Need to purchase new/additional property

       Need finance for exporting or importing

Some companies will provide funding in situations where you are struggling to gain business finances from your bank. They can take a different view on longer-term asset-based finance and look past short-term cash flow problems to consider overall business viability when lending.

Invoice financing or Factoring –

Invoice finance could help when you need:

       Quicker access to cash then your payment terms allow for

       To borrow more than a traditional overdraft would offer as a safety net to cover fluctuations in payment

Some companies allow you to borrow up to 85% of your invoice value immediately, releasing cash that you are awaiting to aid your every-day working capital.

Have questions? Feel free to email me at judi.otton@growth-cast.com

 

Business Budgeting 101

Just because you’ve opened a business, doesn’t mean you necessarily know everything you need to about how to run it, especially the financial aspects. No one teaches this!  Unless you have a finance degree, I bet no one ever taught you how to read a cash flow statement or create (and manage) a budget. Many companies tend to fail within the first five years, mostly due to poor financial planning and budgeting. Being able to understand estimates and match expenses to revenue is important because it helps business owners determine if they have enough funds to operate their business. Without a budget and plan, a company runs the risk of spending more than it’s earning.

 

Here are some steps to build a better business budget.

  1. Check Industry Benchmarks

Not all industries are alike, but there are some comparisons. Google benchmarks for your industry to see what’s out there.  It’s important to do some research about your industry, learn what other businesses are doing, and checking the IRS website to get an idea of what percentage of revenue coming in would most likely be allocated toward cost groupings. Small businesses can be volatile as they are more susceptible to a slow economic turn.

  1. Make a Spreadsheet

I love spreadsheets! Create a spreadsheet to estimate what total dollar amount and percentage of your revenue you’ll have to put toward raw material and other costs.  Do the same with rent, taxes, insurance, etc.  On your first draft, put in everything you can think of, you can always cut back.  If you need a great template to start, I have one – email me at judi.otton@growth-cast.com to get my template.

  1. Factor in Slack

Although you may factor a specific revenue or rate of income, remember to estimate certain expenses that can’t be controlled or aren’t set in stone – like emergencies with equipment or liabilities.

  1. Look at where you can Cut Costs

If money is tight, finances must be found somewhere to pay bills. If needed, consider cutting some costs. Another way to save money is to wait to make purchases until the start of a new billing cycle. With some careful maneuvering, you can create some breathing room.

  1. Review the Business Periodically

While many businesses draft a budget yearly, owners should do it more often. Things change rapidly in the life of a small business owner.  You need to be reviewing your budget at least monthly.  First to compare your actual results to the plan, and second to make any necessary adjustments.

  1. Shop Around for Services/Suppliers

Don’t be afraid to shop around for new suppliers, negotiate contracts on renewal, or to save money with other services being performed for your business. This can be done at many different stages of your business, including annually or during periodic reviews.

The Bottom Line

Budgeting is an easy, but essential process for business owners to forecast their future and current revenue expenses. The end goal is to make sure that there’s enough money to keep the business up and running – and ready to grow.

 

Need further help with preparing a budget for your business? I’m just an email away – judi.otton@growth-cast.com.

True Cost of Social Media ROI

 

When considering social media marketing for your business, there are two factors you should know: Cost and ROI (Return On Investment). I’ve heard some business owners comment that since Facebook and LinkedIn is free, why should there be a cost, but they don’t consider the time and efforts in  content writing and posting? Others may say that social media is only an option in marketing and not measurable. Of course with any investment you put into your business, there is risk. Understanding Social Media ROI really depends of your company and overall goals.

 

What are your goals?

It’s important to include a marketing plan and goals for any advertising or marketing strategy you create. Is your overall goal to increase followers? Are you looking to sell more product? Increase traffic to your website? To determine social media ROI, it gets down how much you’re currently spending and how much your social media impact matters to your business. This is where you have to make some decisions for your company – for example, one company may spend their money on more traditional forms of advertising, such as print or TV. It could be difficult for a company to switch from traditional marketing to social media. However, social media ad spending may actually get more results in the long run, as they’ve recently surpassed TV ad spending.

 

Tracking ROI

Before you start measuring your social media activities, here is a recommended list to follow:

  • Record website analytics – this could be visitors, referral links, SEO rankings, etc.
  • Track customer satisfaction – take a look at the referrals and recommendations from Facebook, LinkedIn or Google My Business.
  • Make a note of KPI’s (Key Performance Indicators) – what is the cost for customer acquisition, advertising, allocation (what’s this?), average sales per month, etc.? You should pay attention to these changes over time.
  • Pay attention for your current social media profiles – watch any changes with the number of connections you have on LinkedIn, Facebook likes and Instagram followers. Don’t forget about who’s subscribing to your newsletters and reading your blogs.

 

Understanding ROI

It’s crazy to think that many companies don’t know how much they’re actually spending on social media. Take a look at which social media channel is bringing your company the most revenue right now and why. Also look at areas where you can improve. By monitoring these changes, you can move forward with a better game plan and hopefully see more revenue.

 

If you’re not sure which channel is right for you, try and experiment with different platforms such as LinkedIn, Instagram, Facebook or Twitter. A restaurant for example might be benefit better from Instagram – customers will react and engage with beautiful photos of yummy dishes and the inviting ambiance. A mid-size consulting firm may do better having it presence focused on LinkedIn, where they can interact with potential clients and engage in conversation within the industry.

 

Social Media Campaigns

Again, one you define your goals (followers, sales, likes, foot traffic), it will be easier to measure your social media performance. It’s important to remember not to hit every platform at once – this can get time consuming and overwhelming.

After defining your goal, budget and a proposed plan – what would be the best ROI for you? Maybe set a company goal of having 10,000 visitors visit your website. You can then measure using Google My Business and Google Analytics how long someone spent on your site, what they clicked and did it turn into a phone call? Which then turns into a sale.

The impact of your social media campaign should be measurable from the beginning with the value of each link trackable. This will make it easier to see which links are building traffic and promoting engagement.

Although it may take some time and patience to see your ROI add up, there are other factors that can help enhance your social media presence. If you decide you hire a marketing company, make sure you go over your overall social media goals, analytics and that you’re on track for ROI.

Have more questions about fitting social media into your budget? Contact me at judi.otton@growth-cast.com.

Sales Forecasting – How am I supposed to figure out how much I’m going to sell in the future?

One constant challenge I hear from small business owners is that they can’t forecast their sales.  After all, how on earth are they supposed to know what’s going to happen in the future?  I have two answers to this.  1) you won’t get it perfect, but that’s still not a good reason not to make your best guess and 2) you have more information than you think.

Why should I forecast?

First let’s talk about why this is important.  You’re making decisions all the time about the future of your company.  Decisions about staffing (when and who), inventory purchases, equipment, location, promotions/marketing, and so much more are all based on assumptions about the future.  What if you had a little bit better insight into what’s likely to come?  Wouldn’t that help you make better decisions?  Of course, it would!

How do I create a forecast?

So how do we forecast?  If you have history, that’s a great place to start.  What did you sell this time last year?  Pay attention to any seasonal cycles.  If you’re a landscaper, winter is not going to be great for you.  If you own a restaurant, January may be slow. If you don’t have history, start slow, start conservative.  You may wish to sell a big number in your second month in business, but that’s not likely.  Start small and increase as you have greater success.  This will prevent you from outspending your income.

You likely have a pipeline – people or organizations that have expressed interest in your product or service.  At each successive stage of your sales cycle, your likeliness of gaining a new customer increases.  For example, you may close 25% of your leads, but 85% when you’ve gotten to the point of providing an estimate.  This can all be figured out from your sales history – if you’re keeping track.

You have goals and new initiatives.  Your business is not standing still.  You’re constantly improving, learning and growing.  If you’re launching a new marketing initiative, for example, what kind of increase in sales are you hoping for?  Take that into account as you’re creating your forecast.  Are you launching a new product or service?  How many of your existing clients can you sell it to?  When launching a new line of business, take into account the advice I offered about to new business owners – start small and increase as you see results.  You should also forecast your new line of business separately, so you can see if you’re meeting your expectations and adjust where necessary.

How do I use my forecast?

First of all, this is not a ‘one and done’ exercise.  Create a 12-month rolling forecast and update it at least once a month.  Include this as part of your financial checklist.  (you do have a financial checklist, don’t you?  If not, grab mine here (https://growth-cast.com/free-financial-checklist/).

Use your forecast to monitor the health of your business.  This is an important tool.  The financials that you get out of your accounting system tell you what happened in the past.  Your forecast tells you what to expect for the future!

If your forecast isn’t what you’d like, make changes.  If you need to beef up your sales or marketing, best to know that in advance, then wait until you have no customers.  If you’re going to need more staff, start looking now and that will keep you from having to ‘settle’ for whomever shows up when you’re busy and desperate.  If you’re going to need additional working capitol to fund all of your new orders or jobs, get that line of credit or other financing source in place now, so that it’s ready when you need it.

Having an up to date forecast is one of the few tools that helps you see forward as your navigating your business growth.  And seeing where your going makes for MUCH smoother sailing.

If you need help with this, feel free to schedule some time with me here: (http://growth-cast.com/book-me )

Cash Flow Challenge

We all know that in order to grow, you’ve got to spend money. The challenge is, where do you get it from?

If you think you’re ready to grow, think again. The signs may have been positive lately: revenues are up, you’re selling more services, and work in coming in faster than you know what to do with. Maybe it’s time to grow your team with new hires, or even increase your marketing budget. Whatever you decide, you want to make sure the foundations of your business are solid enough for the increase.

Growing isn’t just about increasing revenues but increasing capacity as well, all while maintaining the quality of service your customers expect. Neglecting the fact that you’ll need to know where you stand financially and if you can handle the increase, has previously destroyed countless businesses before. Businesses have overspent on marketing and hiring, without knowing how to boost revenue – soon to run out of money.  Conversely, businesses that take on more business than they can handle often implode.

So, what’s the best plan to grow without access to more capital? Draw up a growth plan and fund it from inside your own business. Whatever you do, don’t max out your credit cards. Start looking for money any place you can.

One way is by factoring. Factoring is when a bank or finance company pays you for the invoices that you’ve already sent out. These invoices should have a return of 60 to 90 days, which at that time this particular factoring company can pay you a decent number of cents on the dollar. To find a company that’s right for you, research institutions that advertise in your industry’s trade magazines, that way you know that they’re familiar with your market.

Another way to get access to cash is to get an asset-based loan using inventory as collateral. A lender may find that your raw materials are more valuable, and lend you money against it. You can use the money to fund the production, using the proceeds from the finished product to pay off the loan. An unsecured loan, such as a Personal Line of Credit is also an option, but make sure you can repay what you’re taking out.

Depending on the type of business you have, you can optimize your liquidity in different ways. Such as persuading retailers to purchase your inventory up front at a discount, instead of paying you when they sell. You could even create an arrangement where a supplier only gets paid once you’ve been paid by your customers or retailers.

A different approach would be to see how your high-quality product can be manufactured at a fraction of the cost – that way it can be sold at a better margin. The relationship you build with your supplier can eventually give you better leverage to negotiate better terms in the long run.

In the end, it’s all about making sure every dollar you spend contributes to you becoming profitable. Nothing is more exhilarating than growing a successful business from scratch – wouldn’t you agree? You have to remember though that growing a successful business can take a lot longer than expected, and cost way more than you plan.

Ready to have a conversation? Email me at judi.otton@growth-cast.com

How to Sustain Long-Term Business Growth

Business Growth

For your business to sustain long-term growth, you must understand what sets it apart from the competition. Identify why customers come to you with a product or service. What makes you relevant, differentiated and credible?  Figure out what special benefit only you can provide.  It is important to identify your ideal customer and continue to check in with this audience as you adjust the business to stimulate growth.  Changes must be measurable. If you’re unable to measure a change, you have no way of knowing whether it’s effective. Identify which key indicators affect the growth of your business, then dedicate time and money to those areas. Identify the potential for new revenue streams and determine if they are sustainable in the long run.

Look toward similar businesses that are growing in new, unique ways.  Your competition is likely excelling at something that your company may be struggling with.   Consider why your competitors have made alternate choices.  Focusing on your strengths, rather than trying to improve weaknesses often helps to establish growth strategies.  Making strategic decisions based on someone else’s successes won’t guarantee sustainable growth but it could help initiate a plan to resolve business inefficiencies, refine strengths and better suit your customers.

An important factor in business is the hiring of good people and trusting them.  Allow your employees to do their jobs and facilitate growth while you spend more time thinking about your strategic focus and opportunities.  Don’t forget your existing clients.  They could be your best path to expansion success. It’s usually much easier to find new business from current clients than to start with fresh ones.  Inquire with existing clients about how you can be even better.  Whatever you focus on as a growth opportunity, be sure it’s the right path for your business.  Don’t expand into new business areas just because you can.  Growth will not always bring a more profitable situation.  Be sure new business offers the same margins as you currently enjoy and helps you differentiate yourself from the competition.

Commit time to outlining a plan for your growth.  Outline a clear picture of your business’s current strengths, weaknesses and opportunities.  This should include a vision for where you want your company to be in the next three to five years.  Initiate an action plan to achieve your vision.  Your growth plan could be anything from a rough, informal sketch to a full-blown, highly detailed strategic plan, including everything from a mission statement to scenario planning and financial forecasts.

When it comes to an initial business plan, sometimes the simpler, the better. Even a short planned, disciplined approach to growth, will likely prevent easily avoided mistakes.  Solid business plans don’t guarantee success.  A well-written business plan attempts to organize qualitative and quantitative information in a way that guides decision making processes during conditions of uncertainty.  A solid plan should be used as a communication, negotiation and persuasion tool.  It should provide decision makers with enough insights to assist them in deciding the viability and feasibility of new ideas, strategies and initiatives.