Wednesday, June 4, 2008

SMEs - growing your business (2/2007)

Growth is something that we often want in business but seldom actively pursue. Why?

The main reason is that growth can create problems in a business. Cash flow problems and capacity problems. So why do it? From a personal perspective it is simply because growth is essential in order to create wealth. From a government point of view growing businesses grow the GDP and employment opportunities.

Growth can be a threat to your business, so plan ahead and ensure you are geared for an enormous growth spurt. Growth in a business is driven through the marketing plan. Growth has to start as a conscious decision to want growth. The question is once you have decided you want growth, how do you get it?

There are a number of choices. Do you want to :
• Sell more of the existing products to the same customers
• Sell new products to the same customers
• Sell the existing products to new customers
• Sell new products to new customers.
These are your options. The more you combine the options the greater the growth. So you need to choose the correct option for you. For those of you who want a more detailed understanding of this look for Ansoff's Model.

Key issues of growth are the impact of growth on cash flow, working capital requirements, staff requirements, skills requirements and infrastructural requirements such as office space, warehouse space, furniture vehicles etc.

Do not be scared off. It simply needs planning. Go for it and grow your wealth!

Rob Smorfitt

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