5 signs your small business is ready for its next
As any small business owner knows only too well, the question of investment is never far away.
There’s always something else you could do, something you could invest in that would improve the service you offer, or something you could purchase that would enable your business to grow quicker than it would do otherwise.
For many, however, there’s a huge question of objectivity. The business is something close to your heart. You have hopes, dreams and aspirations for it that rival those a devoted parent has for their children.
So how do you know when your business is truly primed for investment? Here are some of the signs to look out for.
You have a profitable venture
It may sound obvious, but that doesn’t make it any less true. If you’re going to either put more money into the business or seek investment from elsewhere, you need a business that’s working well and is a profitable venture. Investment cannot be seen as a cure for an ailing business – but it could be the spark that ignites it, and takes it from good to great.
Your business is in a growth segment
The business’s product and/or services – and the target market – need to be in growth areas if you’re going to invest and grow. Growth areas are what they say on the tin – they’re growing. That doesn’t mean it’s got to be new or a trend, but it’s got to be an area that’s sustainable. If you’re operating in a flash-in-the-pan sector, or an industry that’s at risk of disruption in the near future, then it may be wise to think again.
Your business is providing something of value that solves a specific problem in its target market
Investment into a business usually means you want to grow or improve. Maybe you want to expand the number of outlets you have, maybe you want to offer more services, or perform part or all of your process more efficiently. If you grow your offering, your target market will grow, too. While your business may provide something of value and truly solve a specific problem for your current audience, will it do the same for a wider audience?
You have a well thought out strategic business plan
When it comes to deciding whether or not your business is ready for investment, the answer is usually in the strategy, not the numbers. If you’re considering seeking investment, you must have a detailed, strategic business plan to understand your business’s strategic priorities. This will give you insight into the areas the business needs investment in.
Consider the key forces driving change in your industry, the factors critical to competitive success, and which of those are your strengths, and which are weaknesses. Your weaknesses are usually the best place to focus on for opportunity.
You have the right people
Finally, you need the structure and people to deliver whatever the investment is going to be used for. If you’re operating a profitable business in a growth market you’ve got a great opportunity. A good strategic plan will give you a roadmap of how you’re going to get there, however you won’t get anywhere if you don’t have the people with the ability to deliver on it. If you’ve got a stellar team with a growth mindset around you, then it’s ready for takeoff!
Ready for your next? Find out how Prospa can help fund it. Get in touch with one of our business lending specialists on 1300 882 867 or find out more.
Growing a business is no easy feat, but the rewards far outweigh the challenges, says this small business owner. She shares what she’s learnt along the way.View more
Every person who visits your website and leaves without a trace is a missed opportunity. Here's how to create a marketing and sales funnel.View more
Subscribe to the Prospa Blog
Be inspired! Sign up to Prospa’s newsletter to receive tips, tools and small business success stories straight to your inbox.