Small Business Growth Cycle
The key for small business growth is to start with a solid foundation. That foundation includes a marketing business plan. As we so often hear, planning to fail is failing to plan. And, small business success is about following that plan.
The second part of the foundation is to have sufficient capital. What is sufficient capital? Sufficient capital is to have enough set aside to take care of you and the business for at least six months.
As a marketing business coach I have seen anywhere from six months to a year. The key is to be in a position to sustain yourself. Also, you want to have enough capital to not only sustain your business but to grow it.
There are the two components of the small business growth cycle. You must have a marketing business plan and sufficient capital. Otherwise your probability of getting where you want to go is greatly diminished.
Small Business Growth-Do You Have The Capital
What is capital? You hear about it all the time. Quite simply, it is the funds you are willing or capable of investing in your business and business growth without knowing when you may see a return.
This is where I have seen most business owners come up short. Somehow they assume that magically there will be enough profit in what they do to support business growth.
Starting your own business is a great challenge. But, running a business in a manner to where it can grow is an even bigger challenge.
In the beginning most businesses spend more money on start up and the first few months than anticipated. This leaves them short of capital to invest in the business. As a personal business coach I can assure you that it is a very good idea to have a budget.
This way you know in advance what to expect and hopefully have contingency plans if things, as they usually do, don’t work out as intended. If you don’t have extra capital or know where to get it then you really don’t have a plan for your business growth.
Small Business Growth-It Depends On Capital
As a personal business coach I have observed that the number one killer of small businesses and the dreams that they represent is lack of capital. Very often small business will start out and be growing.
Yet, the funds aren’t there to help build the processes and structure to support the growth After the unforeseen expenses and unexpected needs there isn’t much left over for business growth.
This is a problem for several reasons.
- If you can’t fund growth, your level of service or the product quality that enabled you to grow diminishes.
- When your level of service or product quality diminishes there is a decline in customer confidence.
- With a decline in customer confidence there starts to be a decline in business.
- If the decline isn’t addressed early on then the business gets a bad reputation and then business growth goes from a hill to climb to a mountain that cannot be scaled.
Small Business Growth-Have A Capital Plan
For all self-employed business owners entrepreneurs and solo professionals it is important to have a capital plan. Some sources of capital can be a bank, the Business Administration or private investors. I caution against private investors. At a bank maybe you can set up a line of credit. The Business Administration has some good loan programs.
If you have a receivables problem there is factoring. There are also business capital sources outside of banking. There are business capital companies that can help you set up business lines of credit or use your assets as collateral for growth capital. They can also help you set up leases and this can improve your balance sheet.