How to Develop the Framework for your Small Business
Traditional frameworks for evaluating the success of a small business often prove inadequate, because they simply don’t take into account all the necessary factors involved. These frameworks assume that all small businesses pass through the same phases, and often characterize them simply in terms of annual sales, while ignoring other key aspects such as number of locations, product line complexity, and the rate of change in production technology. Consequently, the following revised framework is offered as a more flexible and more universal framework for describing small business growth and success.
In this stage of business growth, the main concerns are in acquiring customers and delivering products which have been contracted for. Related issues are whether or not a sufficient number of customers can be obtained, and whether the company has sufficient cash to create an adequate product supply.
By the time a small business reaches this phase, it has shown that it is a viable business entity, and it has enough customers to ensure its survival. It has also demonstrated that it can meet the demand for its customer base, by supplying them with a sufficient quantity of product.
At this point, a business owner has to decide whether he/she wants to consolidate the business and stabilize it for the long term, or whether it’s better to take advantage of the company’s accomplishments to this point. If the latter option is chosen, it becomes much riskier, but there is a potential for greater profits.
During this phase of small business growth, a company is faced with the problem of how to achieve rapid growth, and how to finance that growth. The primary issues at this point are scaling issues, and how to change the company to achieve greater success.
One of the main issues confronting a small business at this stage of growth is how to consolidate and make best use of the financial gains achieved through rapid business growth. Finally, having achieved this kind of significant growth, it must be determined by a business owner how to retain the advantages of being a small business, including the ability to remain flexible, and to retain the entrepreneurial spirit which helped to achieve this level of success.
Is your company poised for real business growth?
If the only thing separating your company from real business growth is the necessary capital, we may be able to help. Contact us at Approved Business Lending, so we can explore some options that may help provide you with financing for that next phase of true growth.