There comes a time for most small businesses to expand and grow. And, if you’re at that point, congratulations! It’s an exciting milestone, and you’ve undoubtedly put in a lot of hard work to get here.
But, as with most important decisions, the decision to expand and grow is not one to be taken without plenty of consideration.
So, what questions should you be asking before growing your business?
We asked Samantha Watt, business consultant and director of Six Bar Consulting, and Nathalie Reiter, eCommerce strategist and founder of The Efficiency Hub, for their advice on how to prepare.
Consider your tax obligations
For many small business owners, taking the next step involves hiring permanent staff members. Doing so may allow you to delegate some of the everyday tasks and increase the volume of products or services offered by your business.
However, permanent staff members often mean new tax obligations. As well as paying their salary and making super contributions, you will likely need to register for PAYG withholding and payroll tax.
You’ll also need to make sure you’re across all tax guidelines and have strong record-keeping practices to keep you accountable and organised. If you haven’t invested in an accountant or bookkeeper, now could be the time to do so.
Manage your team
Whether you’re hiring new employees or already have a team, it’s crucial to ensure everyone is on the same page. After all, they will be your best advocates during a time of significant change.
As well as sharing your vision for the future, remind them your door is always open for honest, two-way communication.
“Ask for people’s opinions, rather than just telling them what’s going to happen,” says Watt. “Make sure everyone is in a position to bring out their strengths and think about how much everyone’s workload is going to increase when you scale.”
As well as the initial briefings, be sure to check in often.
“Regular communication and updates are paramount,” says Reiter. “Providing a forum for your team to express their ideas and also any concerns will be your greatest asset to successful change.”
Systemise your business
Systemising your business is essential for streamlined operations and efficiency. This applies to all aspects of your business – from HR activities such as hiring and onboarding, to financial processes and customer relationships.
However, systemising your business doesn’t mean simply purchasing the newest and flashiest software to automate your processes. You must first map out all your current processes to reveal any gaps or inefficiencies.
“Before you investigate the system to implement, process maps should be completed to ensure the steps required to reach the outcomes you desire are clear and understood,” says Watt.
Weigh expansion against expected revenue
Take note of all of the expenses you’ll incur when scaling your business. Will you need to move into bigger premises or invest in staff development, such as courses, education and certifications? Perhaps you’ll need new equipment, such as desks and computers, software or even a coffee machine!
Then, use a sales forecasting tool to help you predict your future cash flow and revenue growth, in light of your sales history and new expenses. At this stage, you may want to consider speaking to a financial advisor to help make sense of the numbers. Doing so will give you a clearer picture of how much capital you will need to fund this growth while also keeping your business operating as usual.
Consider your options for funding
Think of your small business as a plant. All of the above points are the soil – the foundation on which your business will grow. But capital is like water – you won’t be able to scale your business without it.
The good news is that even if you’re not in a position to reinvest with your current cash flow, there are various funding options available for small businesses.
If you’re looking for cash to fund your business’s next step, a small business loan from Prospa could be what you’re looking for. Find out more.
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