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Some small business owners consider making enough money to pay the bills and occasionally enjoy a vacation to be the epitome of success. For others, keeping their small business small is simply not enough. Many entrepreneurs have a goal of growing their small business into a large one with the potential for greater profits and reach. Following are six methods to consider if you’re wondering how to turn your small business into a big business.
Reinvest in the business
Understandably, a lot of business owners pull money out of the business to pay themselves. When the business is experiencing success, the owner might be tempted to take a significant amount out as a reward for his or her hard work. In most cases, this money would be better spent on the business: to hire or retain top talent, improve training or invest in inventory. By keeping the money in the business, the rewards for the business owner could be exponentially greater down the road.
Prioritize your team
Entrepreneurs often wear many hats out of necessity, handling the core work of the business, as well as other tasks like marketing, accounting and human resources. While it might be difficult for entrepreneurs to hand over control of some aspects of their business, doing so is necessary when growth is the goal.
Acknowledging that you can’t do it all is an important step in opening your business up for growth opportunities. Additionally, bringing in good people who are experts in their fields can help inspire your work and get your business on the track for progress.
Keep the cash flowing
Growth can put a strain on cash flow, and that’s why many businesses fail while attempting to grow. It is important to ensure you have a robust cash flow before attempting any kind of expansion. During your growth phase, be sure to forecast and monitor cash flow diligently. A small business loan can help ensure cash flows smoothly when inevitable challenges present themselves.
Join with a larger partner
Why reinvent the wheel? Small businesses can often take advantage of partnering with a larger, more established company when they’re ready to scale. Big companies have the footprint and resources required for growth, including manufacturing facilities, distribution channels and a proven supply chain. Though it might be tough negotiating with larger partners, many can be enticed by deals that pay a fee per sale.
If you focus on only one product, your business growth is already limited. By diversifying your product line, you open up new revenue streams that can boost your company. Just be sure your primary products are successful and selling well before you concentrate on something new, as you don’t want to spread your resources too thin.
Orchestrate a merger or acquisition
When your business starts surpassing competitors, a merger or acquisition can be a relatively fast way to grow your company. When merging with or acquiring a competitor or a complementary business, you gain its locations, products and staff. A business loan or another type of financing might be necessary to afford this type of growth, but the benefits of taking on this type of debt can significantly outweigh the cost.
There’s not just one right approach if you’re considering how to turn your small business into a big business. Though different entrepreneurs will choose different paths, the fact remains that your business’ potential reach and success can expand exponentially when growth is on the horizon.
This article was originally published on LendingTree.com on Dec. 10, 2015.
Content sponsored by LendingTree.