2018, a good time to grow a business?

Expanding a small business is a bit of a gamble, similar to staring at a blackjack hand: do you stand pat, take a calculated risk, or does your hand look good enough to go for broke? 

In today’s economic environment many small businesses that wondered if they would survive just a few years ago are now thinking about growing. Business optimism unseen in nearly a half-century is helping to fuel the expansion engine.

The National Federation of Independent Business (NFIB) has conducted its Small Business Economic Trends survey for 45 years.  On May 8, 2018, the NFIB released April data showing the highest optimism index in the survey’s history and that small business profits are headed up, fast. In a news release, NFIB President and CEO Juanita Duggan said,

“Never in the history of this survey have we seen profit trends so high. The optimism small businesses owners have about the economy is turning into new job creation, increased wages and benefits, and investment.”

While it may seem like the time for a business to get in on the action, before you play that hand – with the resulting costs and risks - consider prudent suggested steps:

1. Know thyself
 
Conduct an analysis of your present business strengths and weaknesses; otherwise, it’s like building an upper-floor home expansion without knowing the location of load-bearing walls in the existing structure.
 
What are in place in terms of staff’s abilities and training; sales and marketing; technology; physical plant; additional staffing; accounting and financial management infrastructure; and other key operational areas? What would happen under growth stress? Depending on projected growth, where, and how fast, is it necessary to bring on new people or processes? A thorough examination will save time, money, and heartache.
 
2. What is your corporate history and culture, and will it be an asset or liability?
 
If your small business has employees who’ve been with you a long time, that’s an asset. The potential liability: longtime employees may be used to doing things a certain way and will resist new approaches. If you want them to stay, make them part of the change team and ensure they see the personal benefit in your growth.
 
3. Expansion planning occurs in this order: strategy, and then tactics.
 
It’s a general knowing why, how, and what he wants to accomplish with his army (strategy) and arranging troops to carry it out the strategy (tactics).
 
Your strategy may be to increase visibility and sales by establishing relationships with key business and government opinion leaders and decision makers. Among your tactics would be lunches and dinners; events or activities that create news; financial contributions to worthy causes near to the hearts of decision makers; doing (legal, moral, and ethical) favors; or other relationship builders.
 
4. Know your competition
 
You want their market share. They want yours. Yes, you must concentrate on your own business, but to avoid knowing about your competition – their services, pricing, people, etc. – is surrendering ground they’ll be happy to take.
 

Other expansion-related subjects include tax issues; regulatory matters; permits and approvals; and an impressive list of other topics. Engage consultants that are experienced in this field. A plus is if they’ve actually undergone expansion themselves, that way you can avoid someone else’s mistakes and profit from good choices.

These things should improve your odds when you expand your business, and help you grow your baby big and strong.

 

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This article was originally posted in the Knoxville News Sentinel. 

Tagged #JimmyTalk, Business owner, American Economy