Frequently new clients ask me how to obtain financing in order to grow. In response I ask: “Have you explored growing from within?” Surprisingly, many small businesses don’t realize they can generate investment capital through internal operations rather than go into debt through bank financing.
In an economy in which access to equity investment is limited, small businesses can experience sustainable growth through effective cost management and operational effectiveness. Try these “grow from within” strategies.
- Monitor budgets
- Update and work your strategic plans
- Benchmark your marketing efforts in order to measure progress
- Create staffing plans based on year-over-year and monthly trends
- Weigh the gap between gross and net revenue
- Evaluate products and services by understanding operational cost, customer demand and limits of perceived market value
- Measure products and services within the context of business mission and objectives
- Pre-qualify customer prospects in terms of their need and your ability to meet needs in a timely manner
- Establish strategic priorities based on the cost of human resources (salaries, wages and benefits), capital investments (technology, equipment, and facilities), and non-product costs (marketing and training)
Successful, sustainable, profitable growth comes from the ability to balance expenditures and measure the returns they generate. Through careful management of operations and business reinvestment, growth is achievable in any economy and in any market.
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