It seems like everyoneâ€™s going organic these days. Should you? New or old, there is always room for growth.
I have always recommended that clients look first to their existing business to determine if it has opportunities for growth. This is affectionately referred to as organic growth.
Whether you are getting new customers and selling them existing services, or offering existing customers new services or reducing costs, you are increasing that bottom line.
Key ways of increasing your customer base include attending networking events, advertising through various media, word-of-mouth advertising from existing customers, and of course social media.
A client of mine with a dental practice has used all of these strategies in the last year. They have more new patients than they can handle. Be aware that growth does take time, and can distract you from your day-to-day business activities.
Originally my practice specialized in preparing financial statements and tax returns. We have opened up our services to our existing clients by becoming a one-stop accounting shop for them. Now they can have bookkeeping, payroll, HST returns, CRA audits, consulting and estate planning, all under our one roof.
Surprisingly, growth can also come from looking at expenses and determining where you can cut.
Once you have looked at all of the internal options, there are many external-growth options available.
Another of my clients decided to make their business electronic and thereby increase capacity by 200 percent. What they needed, as well as financing, was sufficient space for the processing equipment. They ended up looking in their existing building; the space next door was available. They are now at double the space and capacity!
Look in your existing location for expansion opportunities, as thatâ€™s where youâ€™ve built customer loyalty.
Capacity growth is another approach to growing your business: you analyze whatâ€™s required to go into each unit of production, and then determine how to take it to the next level.
The same client I just mentioned was manually producing their products before they had some money sitting in the bank, and could afford a machine. This new equipment now generates at least double what they used to produce manually in the same amount of time.
It is important to consider new and creative ways to increase capacity, such as adding staff, adding or improving machinery and equipment, improving processes and increasing efficiency.
If you are ready to take it to that level, setting up a new location would also be a fantastic way to grow your business.
That extra location could be in the same province, another province or another country. Sound like franchising? Yes â€“ with the right steps and direction, you could get there.
Whether you grow internally or externally, the issue always comes down to dollars and cents! You need money for any type of expansion. Growing your business is not cheap. Before you take any steps, you need to map out the cost-versus-benefit analysis to guide you in the right direction.
Starting with an internal-growth strategy, where you increase your bottom line by reducing costs, will not only make you a more efficient business owner; it will also allow you to keep money in your bank account that you can eventually use to expand.
Wondering where to get the funds from? The bank youâ€™ve been building a relationship with for years should be willing to help with a sound business plan. If thatâ€™s not an option, thereâ€™s always private equity â€“ or, hey, how about that loving family of yours? I promise to explain all financing options in detail in a future article.
The preceding is for information purposes only. Prior to making decisions, contact your accountant for advice.
Simeen Gaidhar-Bhanji, CA, owns Simeen Bhanji Chartered Accountants, which offers a variety of services to corporations and individuals, ranging from tax planning and consulting, compilation, reviews and audits of financial statements, corporate and personal tax returns, HST services, and consulting for internal control, financing and tax.