For small and medium-sized business owners looking to scale, working capital is king. Business credit cards can be a useful tool while you are just starting out, but managing cash flow with the additional expenses that follow business growth can be a challenge. Business owners who succeed are prepared to meet opportunities as they arise.
Whenever I run into trouble or enter an unfamiliar new space in my business, I often turn to people who have been there before for advice. My go-tos are friends and former clients: Jenny Poon, founder of innovative coworking space CO-HOOTS, and Brent Thomson, CEO and co-founder of Blip Billboards, a digital billboard advertising company.
Poon and Thomson always offer valuable insights to help me think of solutions and push forward. So, find your people—the support your network provides can ultimately help you capitalize on business growth opportunities.
And while you're thinking about who to tap within your community, the following tips can help.
1. Identify what your customer values.
Often in business, your biggest assets are people, not products and services. And those who become your customers have valuable insights about your business you can't find anywhere else. Some of Poon's biggest business growth opportunities come from her customers, she says.
"I talk to my customers or potential customers to identify the problems they're facing and then think about the simplest ways to leverage the strengths and networks I have to create solutions," she says.
For Poon, problems are just opportunities in disguise. You may not notice them right away, but your customers do. Leverage their feedback. Poon focuses on people and looks to improve their experience which in turn, improves her business.
“Identify what a customer values and is willing to pay for," she says, "then test those ideas: compare them against your market and ask yourself if you can compete."
2. Stay attuned to the market.
When preparing to scale, make sure you understand the market. At my branding agency Tote and Pears, we rely heavily on market research to provide the best offering for our clients and to see what opportunities are on the horizon.
Identify the low-hanging fruit first and get in the rhythm of testing those ideas. Lock down your main model and do it well. Then go onto bigger opportunities and expand.
—Jenny Poon, founder, CO-HOOTS
Thompson does the same—keeping a close eye on the market for business growth opportunities.
“I look for opportunities that have the potential to benefit me and my companies as the market becomes more efficient."
Thompson's experiences show that staying attuned with the market allows him to also stay ahead.
“If my success depends on the market maintaining its current levels of efficiency, then my business will be pushing against the tide and less likely to succeed," he says. "The best opportunities are those where I can introduce new market-wide efficiencies."
3. Start small.
Taking on challenges is par for the course when seeking business growth, but they don't have to be a huge undertaking every time. To ensure that you have the working capital necessary to scale and the right processes in place, start small.
Poon does. When considering ways to leverage her strengths to produce impact and profits, she tackles manageable ideas, to start.
“Identify the low-hanging fruit first and get in the rhythm of testing those ideas," she advises. "Lock down your main model and do it well. Then go onto bigger opportunities and expand."
Thompson echoes this advice. He adds, “Find business opportunities that don't require enormous scale before you can make your first dollar. This allows you to begin generating revenue early in the business cycle, which both validates the business concept and also produces cash flow that can be reinvested."
4. Prepare financially.
Positioning yourself for business growth opportunities is just as important as finding them. For many small and medium-sized business owners, funding can be the biggest obstacle to attaining opportunity.
Financial preparation ensures that you can afford big ticket items and still have the working capital and cash flow you need to scale. As Poon shares, good old-fashioned savings go a long way. When she sees an opportunity, she cuts out the frills and keeps money in the bank for a rainy day.
“I save like crazy and build an innovation fund so I can invest in problems I want to solve that will yield a return," she says.
Poon also suggests seeking creative partnerships if you don't have the revenue on your own.
“Sometimes a partner will fund the seed money you need or help build your product and maintain a financially viable business," she explains. "If that's not doable, I look at investors or bank loans."
Maintaining a good relationship with your financial institution is a good way to remain stable. Business loans and small business credit cards can provide benefits to keep you afloat.
Thompson asserts that sometimes, in the short term, building a “good-enough" business is the key to financial security while maintaining a strong vision helps plan for the future.
“Debt funding sources like sound business fundamentals, but aren't terribly concerned with vision," he says. "High-risk equity investors, like angels and VCs, invest in vision, product and market size. Strong vision combined with basic business performance keeps both funding sources as options."
When it comes to business growth, preparation, cash flow and working capital are a few big factors to consider. Leveraging your network, listening to you your customer, starting small and seeking financial stability may just be keys to unlocking the opportunities you need to succeed.
Read more articles on planning for growth.
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