Growth in a business is something that is not necessarily planned as it can happen in the normal course of business.  Most businesses operate to make money, and if the opportunity is there to make more, it is usually taken.  Therefore, preparation for growth is not always and cannot always be carried out.  This can lead to difficulties if growth happens too quickly without a business being properly prepared.   

When thinking about growing your business, there are a number of questions you need to consider.

The first question to consider is why do you want to grow your business?  There are other reasons besides profit which may motivate a business owner to seek growth.  Some of these reasons could include:

• gain economies of scale
• ability to service other markets
• overtake a competitor
• to leave something to the children.

You should also consider: where will the growth come from?

Growth can come from a number of sources including:

• expanding the range of products and services offered
• expanding the range and type of customers the business attracts
• growing your market share by taking customers from a competitor
• expanding capacity to service more customers
• entering new markets (like expanding interstate and overseas)
• acquiring or merging with another business.

Each source of growth comes with a list of pros and cons, and entails a cost to the business, in terms of both time and money.  This needs to be properly assessed before a path is chosen.    

Another important question is: where will the customers come from? Ask whether they are existing customers, customers of another business or not yet customers at all for your product/services. Answers to these questions will guide decisions on how to find and successfully target new customers.

The next question to ask is: how will sales be conducted? The answer will define the marketing, advertising and sales strategies required to bring new customers to the business.

In addition, consider: how the business will manage increased sales? This question looks at the capability of the business to handle growth, including physical capacity, staff resources and skills, administration support and management experience.

Document the answers to these questions in a growth plan or business case that could be added to the existing business plan or created specially for the purpose.

Contact your local Business Advisory Service for advice on managing business growth or identifying consultants who can offer support.