We now have a new Government in the UK and a coalition at that. There’s no doubt that the next few years are going to be hard with the expected tax and VAT increases along with a reduction in spending within the Public Sector. However, on the positive side, there’s probably more certainty in the markets and, whilst it’s going to be tough, the signs are that there will be a slow but steady improvement in the economy.
So, have you planned for growth? Maybe you have found yourself a niche that has successfully got you through the massacre on the High Street? Then now might be the time to be looking to expand.
I’m indebted to Colin Thomson of Cavendish for reminding me of some good tips on planning for growth.
Firstly, know what it means for you, your family, your staff and your company. You are probably going to have to put in the extra hours of work with less holidays and increasing stress. Your attention may be more in demand as it could lead you to being in the ‘spotlight’ within the industry as the boss of a successful growth company. Are you prepared for all this?
You are? OK, lets get started.
1. Budgets and Plans – Obviously, you need to sit down and prepare the figures. Be rigorous in the detail, producing contingency plans with best and worst scenarios. Sound out the experts as they have a wealth of experience with successes and failures. Plan in as much detail as you can as the additional effort will be well worth it.
2. Finance - Get the full backing of your funders. Make sure the Banks and other sources of finance are prepared to support you. Ensure you have more funds available than you plan to need and additional back up arrangements should one or more funders pull out. Keep on top of this, regularly updating cash flows and keeping funders informed during the expansion.
3. Staff – Ensure that you have the support of your staff and have the right people who will be up to the job. Some staff’s abilities will grow with the company but others may not be up to it. Look to hire people for the specification of what the job will be, not what it is now. If they are good they will help you get there.
4. Product – Focus on your core business rather than getting side-tracked into other areas. You’re likely to have more success taking what you do well to other locations than trying to diversify ranges. For example, if you are a successful ladies fashion retailer your skills may not easily transfer into producing menswear or children’s wear range. Also make sure that your suppliers are behind you and will continue their support. This means keeping up with your product requirements and setting appropriate credit limits.
5. Customers - Stay close to your customers. Seems an obvious point but it’s surprising how often you can ‘take your eye off the ball’ during a period of change. It’s always a good idea to keep your customers informed of what’s happening – not only the good things but also when there are problems. They appreciate the updates and will reciprocate with loyalty.
There are many others things you need to consider such as marketing/advertising, staff rewards, facilities, changes to operational procedures etc. But if you can focus on the above points you will be most of the way there.