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Expert Answers to Biz Questions
Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
How to Take Your SME to the Next Level
According to a recent study by the Association of Chartered Certified Accountants, almost a quarter of SMEs (24%) are planning on going global in the coming years. With this in mind, it seems that many small business owners have big ambitions.
If you feel you fit with the stats and want to find out how to grow your business, there’s a lot to consider before you take the leap. To help you make up your mind, here’s a look at the pros and cons of growing your business.
Advantages
There are plenty of positives when it comes to taking the next step with your business. These include:
- Generating More Sales and Profits
Perhaps one of the most apparent advantages of expanding your business is the revenue that it can achieve. Adding to your current offering or broadening your customer base by opening in more locations can result in more sales and therefore more money for the company as a result.
If done successfully, the profits earned can bolster your business and help you to expand in other ways, such as investing in more staff and or premises.
- Attracting More Investment
If your business is doing well and you are seeing an increase in sales and profits, your SME will be seen as a financially viable business. Financial institutions, from banks and insurance brokers to investment companies are more likely to back bigger businesses. This is because they know that these larger companies are financially better off.
- Making Savings
As you grow, you will find that you are able to enjoy discounts and savings. This is because an increase in production brings down costs for things like marketing because you have a bigger pot of money available. Also, you can get discounts for buying things like stationery wholesale.
Investing in the right equipment can help to save money in the long run, too. Items such as commercial washing machines, like these from JLA, or kitchen essentials can make all the difference if you are growing your hotel business or restaurant chain and need to wash in bulk.
Disadvantages
There are some downsides to growing your business, however. Some of these are:
- Complexities
Larger businesses are more complex. One example of this is how much cash you will need to grow your business. You may need to borrow to expand and the initial financial losses can be hard to navigate. You could also lose the high levels of quality as you grow.
- Battling New Issues
A bigger business means more staff to keep happy. You will have to find new ways to manage expectations of your team and accept that there is the likelihood that you will see a high turnover of staff if things don’t go to plan.
In addition, as you will be overseeing a larger company, you will probably have to relinquish a lot of your typical responsibilities, delegating to others along the way. If you feel like you would not like the lack of control, expanding may not be for you.
If you think you are ready to take the next step with your business, it’s worth weighing up the pros and cons before you take the plunge. Whatever industry you work in, you’re sure to find both rewards and challenges as you set out on your new path.
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