5 Growth Strategies for Businesses with Limited Capital

Cash Strapped, Limited Capital

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!

 

Why and How Business Leaders Should Embrace Failure

why and how leaders should embrace failure

“Failure” is considered among the worst words (and concepts) in business practices. It connotes weakness, poor decision-making and an inability to ever succeed. In Ireland, the recessions of the 80’s and 08-12 wiped out many family businesses. It took years for our legal framework to be changed to reflect the reality that after failure,  entrepreneurs must be allowed to get going again. As s Leticia Mooney at Startup Grind writes, “a society that shuns failure and stops making failure acceptable also tends to discourage innovation.

And without innovation, growth isn’t possible.

There are several compelling reasons why CEOs and business leaders should re-examine their notions about failure and embrace new ways of thinking about it. Here are suggestions on how to reframe the concept of failure and leverage mistakes to create new opportunities for growth:

1. Failure involves taking risks, and risk-taking is a good thing. Yes, mistakes can sometimes be costly, but perhaps the real cost is the denial that often comes following a failed enterprise or initiative.

Like just about everyone else, business leaders “don’t like to talk about [mistakes] and bring attention to them,” notes business authors Larry Weinzimmer and Jim McConoughey. It’s more comfortable to gloss over missteps and blunders, but that’s also why “so many leaders have the same struggles over and over again.”

2. Perfectionism can lead to stasis. Leaders often equate “perfect” with “not failing.” But this overlooks the fact that, generally speaking, there’s no such thing as “perfect.” Clinging to a notion of perfectionism can result in a risk-averse culture where no new ideas are ever attempted. And while it’s true that you can’t fail if you never try something, you also can never hope to move forward.

3. Use failure to shift your perspective. CEOs and business leaders often have a “control freak” mindset. If for example, they’ve created a business from scratch, they can point to a fairly good track record of controlling everything so far and succeeding in their efforts.

The hard truth is, you can’t control anyone or anything, except how you deal with failure.

“Obsessing over your failure will not change the outcome,” notes leadership consultant Susan Tardanico. “In fact, it will only intensify the outcome, trapping you in an emotional doom-loop that disables you from moving on.”

By shifting your perspective towards the future, rather than past mistakes, she adds, you can escape that negative cycle “and leave these debilitating, monopolising thoughts behind.”

4. Learn from failure. Every setback offers a learning opportunity, if for no other reason than you now know what not to do in a given situation. In this respect, failing paves the way to new strategies and risk-taking techniques that build on what’s gone before.

When things go wrong, effective business leaders seek out the hard lessons learned from the experience. They are “unafraid of failure,” because they understand that “without taking risks, change and innovation simply aren’t possible.”

5. Failure highlights the benefits of getting outside guidance. Even with the best of intentions, it’s sometimes difficult to escape a cycle of mistakes and setbacks.

In such circumstances, it’s often a good idea to seek a fresh perspective—and that’s where a peer advisory board comes in. In such groups, business owners learn and benefit from mistakes and growth strategies other owners have tried before them.

As members of a TAB Business Owner Advisory Board, for example, members get practical, real-world, tried and tested solutions to the pressing issues every business owner faces—from successful strategic planning to the recruitment and retention of high-performing employees from their Board. They also get expert Business Strategy Coaching from their TAB facilitator.

Failure doesn’t have to be an ugly or unwanted thing. And it certainly doesn’t have to be faced alone. Find out how having a network of forward-looking colleagues can help point the way to success by joining a TAB Board today.