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How to Grow Your Small to Midsize Business

businessman working on his laptop
businessman working on his laptop

In the business world a healthy firm is a growing firm. Perhaps you began as a sole proprietor and are now ready for employees, or you have one location and are busy enough to expand to two. In any case, leading a company as it grows carries with it a great deal of opportunity and responsibility. Many things can affect a firm’s growth so focus on the following facets.

Technology

Rapid changes in technology mean that older systems become out of date at an astonishing rate. Artificial intelligence, the Internet of Things and security breaches are at the forefront of technology headlines, but there is so much more to consider. Each year, evaluate hardware, software and the firm’s information technology practices; make small incremental changes each year rather than sweeping overhauls every five or ten years. User-friendly web stores and mobile apps are essential to good customer service; constant positive social media presence is necessary to engage existing customers and attract new ones. Even mundane daily tasks can be improved through the use of appropriate technology. A good document management system can provide a better way to acquire, organize and share business files, freeing up valuable administrator time. Cloud information storage can be used to enhance collaboration, trim waste, provide convenience, improve response time and increase security. Done right, IT improvements pave the way for other positive changes.

Employees

Happy employees lead to happy customers; and good morale lowers turnover, increases productivity and decreases litigation. Build a firm foundation with workers by recruiting wisely, training thoroughly and rewarding generously. Provide continuous, relevant training; if employees are on the cutting edge of the industry the company will be too. Keep morale high by offering incentives of many kinds. Gifts can prove more memorable than cash and company cultural and celebratory events offer an opportunity to bond. Implement generous time-off policies but make employees want to come to work by taking measures to create an enjoyable work environment: a stocked snack room, onsite fitness facilities or puppy privileges go a long way in fostering loyalty. Don’t rely on perks alone—honesty and transparency show employees you trust them, so be candid about company goals, progress and even setbacks. Encourage longevity by ensuring opportunities for professional development, further education, mentoring and career advancement within the company.

Contractors

Cut waste and expenses by examining your relationship with all contractors: service providers, vendors, brokers, and distributors. Look at pricing, then revisit all aspects of your contracts, such as quality of products and timeliness of services. Question everything: Can you manufacture some items yourself with greater efficiency or lower costs? Will an in-house employee do a better job at certain tasks than an outside service? Conversely, are some jobs better handled by an outside vendor? Specialized fields like accounting, legal and human resources are sometimes so complicated—and mistakes so costly—that outsourcing is best. Determine areas where you can foster loyalty from contractors. Order during a supplier’s slow season or demonstrate deadline flexibility if their production equipment goes down. Remember you all benefit from each other’s success. 

Customers

Customer service is crucial to business growth. It is an oft-cited notion that attracting a new customer costs five times as much as keeping an existing customer. Moreover, existing customers increase profitability—they are much more likely to try new products, and when they do they spend almost a third more. By some estimates, when customer retention rates go up by just 5% profits can rise by up to 95%. Clearly, creating client loyalty has to be a priority for everyone in the firm. Incentivize sales teams to re-engage current customers rather than just to attract new ones. Marketers can reach out with targeted email and social media campaigns, offer perks to return customers, and connect personally with the most valuable clients. There should be mechanisms in place to gather customer feedback and use it to guide decisions regarding compensation, pricing, refund policies and product offerings. Corporate social responsibility measures often play a huge part in customer loyalty; consumers like supporting businesses that support their communities and their causes.

Funds

Growth is a sign of success, but even the most successful companies go through growing pains where existing cash flow just isn’t enough. Seasonal fluctuations can cause a  firm to experience negative cash flow even during periods of relative stasis, so it stands to reason that growth can wreak havoc on the bottom line. Expansion can mean you need more commercial space, new equipment, more staff, updated technology or amplified marketing efforts, all of which require capital. When self-funding is not an option, realize you may need to incur a reasonable amount of debt. Bank loans are an obvious solution, but you may find better rates or terms by thinking outside the box. Lines of credit, peer to peer lending, angel investors and crowdfunding may work depending on your firm’s situation. Explore all the alternatives and research each one thoroughly to find the best fit.

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