Not all small business owners have a strong desire to continue growing and expanding, but the old adage that “if you’re not getting better you’re getting worse” holds true for your one-person company as much as for a major manufacturer. Bookkeeping software and accounting software can help you devise a small business growth strategy by making your small business finances easier to understand and evaluate. But there are a number of other things you need to do and questions you have to ask beyond just using good accounting if you want to grow your business.
The first question you need to ask is how your company can grow. What does growth look like? This seems obvious but not all businesses grow the same way. Do you want to get more customers in your local area, appeal to a different demographic, or get existing customers to spend more? Thinking about it from the opposite perspective, what’s preventing your growth? Do you not have enough sales, need more product to keep your online store stocked, and lack sufficient employees to deliver your service more frequently?
Once you have an idea of the nature of your company’s potential growth path, you can think about how to make that happen. It’s often going to require a new marketing strategy of some sort, but you could also consider retraining your staff, finding a way to offer your product at a lower price, or adding a new product. Industry research can be helpful at this point. Your small business obviously competes in a market, so your strategy needs to address how you will capture more of a finite resource; either customers’ money or suppliers’ money in the form of lower costs.
The data from your accounting software will be essential for the next step, which is to actually create a growth strategy. Your profit and loss data is the first window into what is and isn’t working, allowing you to decide if you want to emphasize strengths, focus on shoring up weak spots, or target expenses. It’s also the place you have to look to find the money to pay for your growth strategy. That’s the next question you have to answer. What do you have to change and sacrifice to make growth possible? Small businesses have less leeway in their budgets than large businesses, so they typically have to cut one expense to add or expand the new expense necessary for growth.
There will also be implicit costs of expanding, so called growing pains. Your business growth strategy should obviously focus on successfully growing the business, but you need to plan ahead and think about how to deal with that growth. Will you need more employees, more server space, a larger travel budget, or perhaps just a new computer to accommodate all the new activity? You have to look at the budgeting and online accounting sheets you have to plan your growth budget so that these changes won’t be a problem.
The last thing you need to do with your business growth strategy is break it up into steps with goal dates and milestones. That way you can engage in short- and medium-term efforts and be able to check your progress along the way with a higher level of accuracy. It’s a lot more than just looking at some numbers from an online accounting sheet, but these steps are your best bet for small business growth.
