Professional Documents
Culture Documents
Because their competitors are growing. If the company remains stagnant and do the same
thing over and over without any effort to expand their business, their competitors can crowd
them out of the market. But if another company is increasing their market share, then that
means that another company is decreasing their market share (assuming same number of
competitors in the market). If the company starts experiencing a declining market share, then
it could affect their bottom line -- which could threaten the company's survival
Expand Markets and Increase Sales Expanded markets and increased sales mean more
profits. Profits mean success for a business. They also mean that a business can make
contributions to causes that they believe in. For example, MAC Cosmetics is a business that
increased sales and broadened their markets in order to become more successful. This
business started as a small idea and eventually expanded to a greater establishment by going
international.
Recruiting
Growing businesses can attract energetic employees who want to be at the centre of the
action, perhaps to share the rewards.
Obtaining financing
Lenders and financiers take growing businesses seriously, although they may temporarily
see them as riskier. Larger size enhances marketplace credibility and presents an image of
strength.
Brand recognition
Bigger businesses have more customers, giving them an advantage in marketplace
recognition.
Economies of scale: Customer base: Will expansion expose you to new customers? And
will your existing customers remain loyal while you work through any growing pains?
Yourself: Will expansion bring unavoidable stress into your life that could potentially deter
your ability to successfully operate the business under the new expansion?
Networking/versatility: This is one of the things to watch. It tells about the locations,
involvements and your activities around the globe. Without networking, a company's
expansion policy is never complete.
The team that can successfully run a $1 million company is not the same team that can run a
$100 million company. If your goal is growth, hire people who can perform in the size
company you want to be--they'll help you get there.
You are delegating mission-critical tasks that you once did yourself.
You delegate tasks that you once did better and faster yourself.
You set up reporting stages and mentorship reports for employees that have been
assigned complicated tasks that you once handled so that they can accomplish them
successfully.
You determine which tasks to delegate consciously while deciding how your time is
best spent, so that task is not just delegated simply because it remains undone.
What do we do poorly?
What changes are occurring with our customers, i.e. age, spending habits, values,
residences?
Are there new competitors entering the marketplace and what is their strategy?
Do you have the following building blocks of growth in place, and can you manage
them?
Controlling costs
Core Competencies - Now that you have a growing business you need to measure the
aspects of your business that drive your profits and those that increase your expenses,
Planning the Growth & Controlling Costs - The tools for planning your
growth and maintaining your costs are cash flow projections and multiple scenario budgets
planned on a shorter term than one year. While it may be pessimistic to plan for failure, do
the math and figure out what things might look like if more money is going out the door than
coming in.
Manage the Cash Beast - Cash flow is king in all businesses, but especially small
businesses. A poor business plan, operational budget and cash flow plan make you a financial
risk. Get in the habit of doing a mini-business plan for every project, complete with a cash
flow projection and best-middle-worst case scenario. Start some cash flow kick starts today:
Do employees have the necessary skills to support your growth strategy? Will you
need to hire new staff or provide additional training?
How will you maintain service levels while reaching for new business? Are current
operations, including order management, customer service, record keeping and
inventory control, running smoothly and ready to take on more?
Where's the money coming from? Will cash flow from sales be enough to support
your expansion, or will you need lender or investor financing? What will you need the
money for? Study historical cash-flow statements as a guideline, then determine cashflow needs on a weekly, monthly and annual basis to plan your funding strategies.
Are you ready to delegate more tasks and give managers more control?
Does expansion rest on a reliable mix of intuition, solid competitive analysis and
customer research?
expansion because they are the brain behind any move to attain greater heights.
ii. Product diversification: An organization with a lot of goods and services in high
demand credited with its name is without doubt expanding. This is very important, as
heights.
v. Annual Accounts: This shows a company's profits, losses, access etc. It is a
yardstick to ascertain the financial strength of an organization.