How do you grow a small business with little or no money? This is usually the question I get from startup entrepreneurs wishing to grow their business to stability. While I don’t have all the answers to the question “how to grow a business,” I believe this article will provide the basic answers you need.
Now it’s one thing to start a business but growing a business is where the true business challenge lies. I got the inspiration to write this piece after reading the article; Why Grow? And Other Wisdom from 37Signals. All entrepreneurs desire business growth but most of them don’t know why they need to grow and how they want to grow.
Now before you begin to seek answers on how to grow a small business; you must ask yourself the questions: why do I need to grow? What kind of growth do I want? How do I grow?
The answer to these questions is very important because it will help determine your business growth pattern, plan and strategy. Well, while I can’t help you discover your need to grow; I can definitely provide you some tips to growing a small business from scratch with little or no money.
I have started and grown several businesses from scratch with little or no money. I believe in running a business on lean budget; I believe in tactical deployment of resources and this business philosophy has worked for me over the years. Now how did I grow from a small business to a big business? How did I survive and expand my business on a lean budget? You are going to find out below.
12 Practical Tips on How to Grow your Small Business Fast
The first strategic step to growing your small business on a lean budget is to focus on fulfilling your business mission. On the entrepreneurial journey to growing your business, I will advice you start from the business mission. Why?
“The thing I really care about is the mission; making the world open.” – Mark Zuckerberg
The reason is because the business mission is where the entrepreneurial spirit dwells. It’s the heart of the business; it’s core. Most importantly, your business mission is the reason why your business exists.
You might grow your small business to a substantial size but if that growth does not help your business fulfill its mission; your business growth will be short lived. So stay true to your business mission; it’s the first prerequisite to growing a business successfully.
2. Develop a challenging vision
No entrepreneur wakes up one morning with a desire to grow. The need to grow a business is usually prompted by circumstances and such circumstance can help you forge a vision for your business. But is a vision enough to help you grow a business? I don’t know. But what I do know is that the kind of vision you develop depends on how fast you want your growth rate to be and the level you want to grow to.
However, I will advice you set challenging goals; goals that will force you out of your comfort zone. Don’t develop a vision you are comfortable with; develop a vision that makes you uncomfortable, develop a business vision that forces you to use your critical thinking skills.
One of the visions of my company is to grow into a conglomerate in at least five different sectors of the economy by the year 2020. For me, this vision is challenging because it forces my entire business team to come up with creative growth strategies that enable the business grow faster than the average industrial growth rate.
Knowing the resources we have at our disposal, this vision seems impossible but my team believes it’s achievable. So don’t settle for average; set a challenging business goal and go for it.
“Bringing together the right information with the right people will dramatically improve a company’s ability to develop and act on strategic business opportunities.” – Bill Gates
The third key to growing your small business from scratch on a lean budget is to reposition your business team. To grow your business, the right people have to be in the right position.
Analyze the strengths and weaknesses of your business team and delegate duties to them according to their strength. If there is a weak chain in your business management team; consider bringing someone in to fill the gap. A strong business management team is essential to business growth.
4.Emphasize the need for speed, effectiveness and efficiency
Are your employees aware of the need for your business to grow? Are they aligned with your business mission? Do they understand the vision? These are questions you must put to rest.
In an article I wrote “10 Business Challenges of Starting a Business”, I emphasized that building a business team is a major business challenge but selling your vision to your team is more challenging.
“The most important ‘speed’ issue is often not technical but cultural. It’s convincing everyone that the company’s survival depends on everyone moving as fast as possible.” – Bill Gates
Business is a team sport; you can’t do it alone. Employees are your representatives to the customers; this is the more reason why they need to be fully aware of your business goals and objectives.
5. Strengthen your business internally
Most entrepreneurs are always in a haste to grow externally because it’s more obvious and gives the entrepreneur a sense of prestige. But more important than external growth and expansion is the internal growth. I have seen businesses fail because of too much success. They grew big but couldn’t sustain the pace; so they shrink and collapse.
This is why you need to grow internally first. Now what is internal growth? Internal business growth entails strengthen your bottom line, improving your employee’s effectiveness and machine’s efficiency. It may also mean repositioning your business team and automating your business processes. Once a business effectively grows internally, growing externally will be seamless.
6. Keep an eye on the cash flow
“Cash never makes us happy. It’s better to have the money burning a hole in Berkshire’s pocket than resting comfortably in someone else’s.” – Warren Buffett
Cash flow is the life blood of business. Remember that you are growing on a lean budget, so every penny has to be accounted for. You must know your numbers and above all, you must know your financial position at all times.
“The most important word in the world of money is cash flow. The second most important word is leverage.” – Rich Dad
“Focus on your customers and lead your people as though their lives depend on your success.” – Warren Buffett
Remember I said earlier that a good internal growth will make your external growth seamless.Now while growing internally, you can instigate external business growth by taking care of your customers and encouraging word of mouth. Customers are the reason you are in business so make sure they are not ignored during your growth process.
“The most important single thing is to focus obsessively on the customer. Our goal is to be earth’s most customer-centric company.” – Jeff Bezos
Find as much customers as you can and keep as much as you can. Most importantly, allow your existing customers help your business find more customers by encouraging them to talk about your company. Word of mouth was the way Amazon and Mrs. Field’s cookies grew to become multi billion dollar companies.
8. Go strict with employee performance evaluation
So you want to grow your small business on a lean budget? Then you must maximize every resource at your disposal, leaving no room for inefficiency and waste. You must also evaluate your employee’s performance rate at regular intervals and any employee that doesn’t meet your standard should be fired.
“Well yes, I have fired a lot of people. Generally I like other people to fire because it’s always a lousy task. But I’ve fired many people.” – Donald Trump
9. Seek strategic alliance
“Our success has really been based on partnerships from the very beginning.” – Bill Gates
Forming strategic alliance is an effective way to grow big, while still remaining small. Look within your neighborhood first for opportunities to form strategic alliances and if you can’t find any; create one.
10. Focus on the core and outsource the rest
If there’s any secret to growing a small business from scratch on a lean budget; then it’s definitely outsourcing. Outsourcing is the reason my entire business keeps growing; yet, I remain small. To the outside world, my business size is still the same but on the inside; my profit is doubling.
To really appreciate the power of outsourcing, I will advice you read “Why Grow? And Other Wisdom from 37Signals”, it will change your perception about growing a business. With the rate at which business is changing, it’s now possible to operate a million dollar company from just a small office using the power of outsourcing.
Every business has a core. So find your core, focus on it and outsource the rest. If your core is marketing, focus on it and outsource every other thing. Every business process can now be outsourced; from production and distribution to human resource management.
Growing on a lean budget requires you re-invest every single profit into the business. Re-investing profits is essential to business growth.
12. Stick to the process; keep growing
The last but not the least step to growing a small business is to stick to the process. Building a success business is not an overnight process; it’s a process that takes time and requires persistent. To stick it through to the end of the process, you need to see the big picture of where you are heading to; you need to envision the end point of that process.
“Press on. Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.” – Ray Kroc
Starting the growth process of a business is easy but keeping at it is difficult because with growth comes the need for constant change. If you are in the same entrepreneurial journey of growing a business with me, I encourage you to stick it through and keep moving forward. I will see you at the top.