How to Grow Your Business

What is Business Growth?

Once you have an established business, the next phase is focusing on how to grow that business in a way that is profitable and meets the goals of the owner and management team. Business growth is the stage of your business where you are looking to grow by expanding your demographic reach or by adding products or services to increase your revenue potential.

Why is Growing Your Business Important?

If your business isn’t growing, you could be facing future risks. A non-growing business could easily become stagnant which could lead to a declining consumer base. Consumers are savvy and always looking for increased value, dependability, and new features when they purchase products and services. Growth can be achieved and measured in a variety of ways including:

Increasing your customer base

Increasing your employee base

Developing increased sales opportunities

Creating new revenue streams

Minimizing expenses to increase profitability

Increasing business value with capital improvements

Developing a plan to grow your business will be dependent on its lifecycle stage.

Just Starting a Business?

If you own a fairly new company, growth is needed to be relevant in the market and generate a revenue stream large enough to be profitable. As you develop your customer base and hone in on your product and service offerings, do so with future growth in mind.

Have You Entered the Growth Stage of Your Business?

You now have a good idea on what you are offering so it’s time to increase market share, add employees, and invest in the assets your company needs to expand. There is a delicate balance between understanding your revenue potential and aligning that with the increases you will be incurring. Developing a growth strategy will guide your decisions today, tomorrow, and for future years. A growth plan should have realistic timelines, reachable goals, and measures of success along the way.

You Have a Mature Business, Now What?

This is the stage you have worked hard to reach. Focus now on operational efficiencies to increase your profits and develop a good cash flow. This will allow you to increase product or service offerings and expand your demographic reach through an acquisition. A valuable business has an owner who isn’t integral to the day-to-day operations, so this is the time to delegate to your management team.

As you grow your business into a valuable asset for the future, the first step is to assess the value using the 8 key drivers of business value.

Each of these value drivers are used to evaluate where your business stands today and outline areas to improve.

The Value Builder System™ used by SVA looks at:

Financial Performance
Growth Potential
Independence
Working Capital
Hierarchy of Recurring Revenue
Monopoly of Control
Customer Loyalty
Management Depth

Start by taking a quick survey to get your Value Builder Score. The assessment you receive will include a discussion of your overall results, some quick tips for improving your grade on each of the eight key drivers, as well as an action plan for improving your score.

Fill out the form below to get your survey!

You have a vision for your company and you have mapped out the key performance objectives to accomplish that vision. Budgeting and forecasting is a critical tool in the planning process to ensure you achieve those performance objectives.

The goal of revenue and expense forecasting is to help you make good financial decisions to manage business growth. You should define the tactics and strategies that align with your budget to set your business on course to achieve your desired growth and success.

BIZ TIP: Forecasts vs. Projections: What's the Big Difference?

A cash flow forecast ensures you have the financial resources to fund your company’s growth or simply to make the next payroll. During economic or seasonal disruptions, understanding your cash flow is vital.

Part of the process of reviewing your cash flow is looking at how your revenue comes in and comparing it to when you are paying your bills. Reviewing your accounts payable and accounts receivable processes will give you insight into adjustments needed.

Having a good financial reporting process will help you always know your cash position and allow you to quickly adapt if necessary.

VIDEO: The 5 Best Tips for Managing Cash Flow

Most companies want to do better than just covering all fixed or variable costs, but they aren’t certain of the factors involved to make that goal attainable.

Part of the process is making sure all costs are considered, pricing for your product or service is right in today’s marketplace, your sales goals are set at the right level, and the cost of buying the materials for your product is in line.

This process will clearly define your average per unit revenue, average per unit cost, and your monthly fixed costs to get you to that break-even point as fast as possible.

BIZ TIP: Master Your Growth Goals Using a Break-Even Analysis

Benchmarking is the process of measuring a company’s financial performance to other similar companies. Businesses then use this information to “grade” their performance in various financial areas and identify where they are performing well and where they are lagging behind.

Once areas in need of improvement are identified, a plan with specific action steps and measurements can be created and implemented.

BIZ TIP: 5 Elements to Benchmark Your Company's Financial Performance

The goal of an operational analysis is to determine how efficient and effective your processes are. As a business owner, you may be so close to the process that it is hard to have a critical eye when reviewing how things are operating.

Bringing in an outside perspective will help you assess if there are more efficient, lower-cost ways to meet your customers’ needs. The analysis can also provide insights into the financial performance of your business, allowing you to make adjustments where needed.

BIZ TIP: The Many Uses of a SWOT Analysis

Resources

Using Value Drivers to Increase Business Value

In this eGuide, you will find ways to understand and implement key value drivers for your business. Start now to determine your company’s overall health.

Learn More

sva-certified-public-accountants-eguide-the-financial-reporting-manual-2023

Financial Reporting Manual: A How-To Guide for Small to Medium-Sized Businesses

Accounting accuracy is required for every business as it measures the organization's financial health. The eGuide discusses the importance of accounting software and procedures, and why data processing is an essential part of it all.

Learn More