Tips on growing your business

For many of my clients one of the main areas of concern is how they plan to grow their business. The current economic climate, restrictive lending and repeated press coverage of the recession can dampen the spirits of some owner managers and their plans for growth. But surprisingly, the current economic climate may just be the best time.

Smaller companies with strong management teams and a proven track record are uniquely placed to grow right now. Lots of owner managers and directors might be surprised to hear that but the current environment means that there are businesses out there to acquire.

For companies on the acquisition trail, that’s good news and there are bargains to be found.

Before you look to acquire another business though, you need to prepare a credible, proven growth strategy within the company. This will strengthen your position substantially. Lenders want to see that you know your own business, your own markets, your competitors and your customer bases and that you have accurately assessed your growth potential. They also want to see that you’ve done the due diligence on your proposed acquisition target.

There is help available. Most people are very good at their particular trade or profession but when they start out, they don’t necessarily have the business grounding to have goals in place. I help my clients work out a business plan for regular review which sets achievable goals for growth.

I sit down and talk to my clients, encourage them to think about what they want to achieve, set out objective and create the right management structure. Growth should be much easier if you have got the right product at the right price that people want to purchase. But these days, you need the ability to identify a new product or service that will be in demand.

If you’re looking to acquire, your business still needs to be an attractive prospect. So here’s some tips:

1. Avoid one-off transactions if you can. Try and lock your income in on an ongoing basis.
2. Find lots of different ways to earn more money from your customers.
3. Build trust with your customers and provide that one-stop shop.
4. Aim to be more than a commodity and you’ll be a more attractive funding prospect.
5. Be sure you can explain what your business does and how it works to a potential investor.

Human relationships are the key to deals. One key piece of advice is to build a relationship of trust with your bank manager and you are a lot more likely to get what you want.

Are you on the acqusition trail?