Planning for Growth

Planning For Business Growth

Far more books and articles are written about starting a business than growing one. Perhaps that is because there are some very basic activities that apply to the start-up of a wide variety of business types. After the business survives the trauma of grand opening and struggles through the break-even point, the methods by which it will grow differ by industry, customer type and even entrepreneurial management. Owners have to decide how best to grow the business by analyzing a number of factors affecting expansion:

corporate mission
strengths and weaknesses of the business
financial resources: existing and potential
customer needs
competitive influences
life cycle of existing products
profitability of potential products
human resources: sufficiency and capability
sales and service capability
research/development time and expense for new products
business environment: economic conditions, access to raw materials, industry trends

Statistical sources for business information often cite lack of money and lack of management expertise as the primary reasons for business failure within the first five years. If an entrepreneur makes errors in assessing the variables above, the results can be more costly than the business can survive. If growth is too rapid and uncontrolled, cash flow, assets, quality control, and management systems can suffer irreparable damage. A firm's growth should be planned as carefully as its start-up. The most basic tool for growth is a strategic plan. An extremely important adviser to any growth plan is an accounting expert to help evaluate the financial risks of proposed strategies. The accountant can anticipate the cash requirements of a growth plan and recommend the timing and sources of financial assistance if required.