Even if your business lacks unlimited capital, this doesn’t mean you can’t plan for ongoing or future growth. What matters most is doing all that you can with the resources you have.
Being cash-strapped “does not need to be the death nail of your business,” notes small business expert Melinda Emerson. “Hundreds of millions of people throughout history have started and maintained their own small businesses without access to an unending supply of cash.”
Here are five suggestions on how best to plan for growth when you’re working with limited capital:
1. Be realistic about your company’s growth potential. Prior to making the leap into scaling up, says Jim Morris, President and Owner of The Alternative Board Tennessee Valley, “the business owner should do a cash flow and working capital analysis to determine if the business can fund itself adequately as it grows.” Financial preparation, as well as a working knowledge of your company’s current and future needs, he adds, “must be evaluated to avoid cash problems and unpleasant surprises that can come with growth.”
2. Develop a focused marketing plan. To get where you want to be, your planning should include a focused marketing strategy. With your limited capital resources in mind, establish a marketing framework that combines an in-depth knowledge of your target audience with a comprehensive competitive analysis of the marketplace. This way, you “enter the fray” with a keener grasp of what expansion costs will look like over a set period of time.
3. Maintain a tight approach to hiring. Attempting to grow on a limited budget is tricky enough without going on a hiring spree. How much of your future growth depends on having a full-time staff? Where possible, look to outsource key operational activities to meet your expansion goals, without incurring added expenses related to payroll, healthcare and other legally mandated benefits. A lean workforce can help you shift valuable resources elsewhere.
4. Diversify or add a new offering. There may be ways to refine your existing goods or services to attract a broader array of customers (in addition to your existing customer base). Or you can explore a new offering that broadens the appeal of your company. When you diversify, you “also protect your existing customer base and create multiple income streams that can often fill seasonal lows and, of course, increase sales and profit margins.”
5. Boost your social media marketing activities. One path towards effective growth lies in leveraging the ever-growing power of social media. Numerous TAB Members have successfully harnessed that power to increase sales, including the following:
- Boosting brand awareness by encouraging satisfied customers to post positive reviews on Yelp and elsewhere
- Using a Reddit profile to generate new sales leads
- Posting new content on Facebook, Twitter and elsewhere that highlights your status as an industry thought leader (with links back to the “Learn More” page on your business website)
- Synchronising email campaigns with social media advertising for broader impact
- Finding and attracting customers through unique Twitter hashtags
As long as you avoid the hard sell, social media is a fantastic venue for posting customer testimonials, details about a new product launch, news about special sales promotions, etc., without having to spend vast amounts of money on advertising campaigns.
Small businesses can’t match the resources of a larger competitor, but there are still many ways to plan for and achieve expansion. The key is a wise application of limited capital with the right growth strategy.
Want to learn more about strategic planning and price increases? Find out if a TAB Board is right for you!