Identifying, assessing and appropriately acting upon business growth opportunities is always one of the most crucial aspects of business success. And even in difficult economic times, there are likely to be opportunities for solid, successful businesses to develop and grow.
Indeed, there may even be better, or more, opportunities for some businesses during a downturn!
However, before taking any steps to expand, businesses should ensure that they have first established a solid base from which to grow, particularly in the current economic environment.
This means ensuring that the present business approach is working well and that trying to take advantage of a new opportunity doesn’t become a costly distraction.
Before undertaking any growth plans, business owners should run through the following checklist:
- Ensure management has a strategic focus and plan
- Understand the business and where it makes profit and losses
- Undertake value chain analysis, some elements may add value whilst others simply add cost
- Diversify roles and responsibilities. Is the business dependent on one or two key individuals?
- Ensure key management are “tied in” to the business. For instance, make sure key people are remunerated and incentivised at or above market rates
- Ensure sales force is genuinely customer-driven – merely “pushing product” is not focusing on what customers really value
- Conduct opportunity cost analysis and prepare a business case before making any commitments
- Evaluate outsourcing options, and consider their benefits and limitations
- Look at procurement opportunities and inventory decisions - early payment discounts, optimising inventory levels, bulk purchasing etc.
- Consider developing strategic alliances. Rather than be “all things to all people”, focus on areas of the business where it has a competitive advantage
- Consider acquisition of complementary businesses which are struggling in the current economic environment, particularly if they create economies of scale, spread customer risk, or improve equipment utilisation and capability
- Undertake an equipment maintenance program to ensure the business can handle additional work
- Consider tax planning. That is, the legal means of structuring a business so as to optimise the tax position