Test if you are ready to grow
Whether you’re a sole trader, in a partnership or run a company, growth and innovation takes the right plans, resources and attitude to succeed. Here’s where you’ll find a guide to what’s involved, and a self-assessment to test if you and your business are ripe to expand.
Whether you develop new products, move into new markets or create innovative business models, strategic growth can lead to substantial financial and personal rewards.
But you need to be ready for any challenges you might face. Consider your strategy, position and capabilities when you are weighing up whether you’re ready to grow your business.
Why grow?
Successful business owners continuously improve and expand their products and services.
Business owners and sole traders who strategically grow:
- increase their profits and sales
- stay relevant
- perform better than their competitors
- have a better chance of surviving in the long run.
There are several government-supported programmes and funding opportunities to help you grow your business.
Planning to grow
Hone in on what you are trying to achieve and why.
Set goals that are:
- Specific: Define exactly what you want to accomplish.
- Measurable: Make sure you can track progress and measure outcomes.
- Achievable: You must have a reasonable chance of success.
- Relevant: Set objectives appropriate to your overall business strategy.
- Time-limited: Work towards a deadline to keep on track and focused.
The next step is to identify the strategies and tactics you can use to achieve your goals.
Common growth strategies
Each has its own potential risks and rewards.
Work with advisors to choose which is the most appropriate for you — and continue to do so as you grow. Surrounding yourself with an extensive support network will help you achieve better results.
| Growth strategy | What it’s for |
|---|---|
| Product development | Creating new products and services for existing markets. |
| Market penetration | Selling more existing products and services to existing markets. |
| Market development | Selling existing products and services to new markets, eg another part of New Zealand. |
| Diversification | Developing new products and services for new markets, eg exporting. |
Plan for success and for failure.
A good growth plan includes KPIs — key performance indicators — and contingencies.
Realities of growth
When you take your business to places it’s never been before, challenges will crop up.
Common realities of a growth spurt include:
- Increased costs and overheads — your cash flow and work/life balance will most likely take a hit.
- A significant change in your current systems and structures — or a need to throw them out completely.
- Competing priorities.
- A shift in your company culture.
- Lacking the talent or internal capacity to meet growing demands.
Liken growth to going up a steep hill in a manual car. The hard work you put in upfront will have few immediate results. But if you keep on course, you’ll build up momentum and speed over time.
If you’re growing fast, consider setting up a board for support and advice.
Boards can provide you with the high-level support you need to reach your potential.
Common mistakes
- Not seeking external advice — work with trusted advisors to ensure your plans are realistic and achievable.
- Quickly hiring new staff to deal with an increased workload — first weigh up the long-term scope and cost of any new roles, and only bring on people who are right for the business.
- Not measuring your progress — you should have KPIs in place to make sure you’re on track for success.
- Not being ready and willing to scrap your agenda when things aren’t going according to plan.
- Underestimating the costs — both financial and emotional — of growth.
Do you use a small business advisor, eg an accountant, lawyer, business mentor, management consultant, broker?
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