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    Grow Your Business
    June 17, 2014
    Hiscox small business insurance logo

    Small Business Growth: A Blessing and a Bane

    Small business inspiration

     | 

    Management

    By: Hiscox Blog

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    Business growth means increasing challenges. Use these four tips to be ready to ride the wave of growth when it comes your way.

    Small businesses help drive our national economy, comprising 99.7% of U.S. employer firms. And many of them are optimistic about the U.S. economy, according to a recent survey we conducted.

    But unfortunately, less than half are still in business five years after they start – some because of slow business, but many because they weren't prepared for growth.  While growth is pretty much every entrepreneur’s dream, it won’t really benefit your small business unless you’re ready to handle the associated challenges.  Use these ideas to make sure your business is ready to capitalize on expanding revenues and customer counts.

    • Prepare for growth

    Sounds so elementary, right?  But if you don’t have accurate supply-and-demand predictions that are based on thorough research you’re shooting in the dark.  Start-ups and new businesses don’t generally have unlimited resources available to handle substantial growth, but you must be prepared to accommodate new business without sacrificing quality.

    • Expand your network

    Will your current suppliers and vendors be able to meet your needs if you experience a rush of new business?  One of the worst things that can happen to a small business is not being able to meet quickly growing demand.  If you expand your network now, you’ll be ready to roll when demand spikes.

    • Set aside your financial cushion

    Whether you’re preparing for growth or not, a financial cushion of three to five month’s operating expenses is a good idea.  In addition to cash reserves, make sure some assets, such as receivables, equipment, or vehicles, can be turned into cash quickly if your cash reserves become depleted quicker than you anticipated.

    • Get outside input

    It takes guts and know-how to start your own business.  But these positive character traits can become detrimental if they prevent you from seeking outside counsel.  Growth always means new and unfamiliar challenges, so  talk to a consultant, find a mentor, or join a mastermind group.  These people can help you solve problems and pinpoint problems you may have overlooked.


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