In the spirit of celebrating the millions of Australians who stand behind our small businesses, we’re exploring a few strategies that leaders can employ to supercharge growth as we approach a busy time of year. Small business owners work incredibly hard. Achieving profitable and sustainable growth is challenging, but effective planning, self-awareness, and the right funding makes a big difference.
1. Start by looking inward
The best business growth plans start by understanding who you are and why you do what you do. What’s your value proposition? Why do you think customers choose you, and why do they actually choose you? These two answers aren’t always the same. For example, you might think you’re competing on service, but customers may actually be choosing you due to price. What are your current strengths to build on? Who are your ideal customers? What are your weaknesses? If you’re having trouble meeting commitments to customers or don’t have strong processes to ensure consistent delivery, now’s the time to fix that before you expand rapidly. Who are your competitors? When they beat you, why did they win? Sometimes you can learn this indirectly, through social media comments or the anecdotal experiences of your team. But often you need to ask customers and prospects directly.
2. Play to your strengths
After some self-reflection, you can begin identifying promising business growth opportunities. Would a bigger retail space to house more products lead to a sales spike? How might a more intuitive website impact sales? Don’t get so focused on one idea that you fail to consider others. For example, if you’ve profiled your ideal customer, think about additional services or products they might want or services that might add value to what they're already buying. Perhaps you can identify an underserved market your competitors haven’t noticed. Maybe the best way to expand the business is through horizontal integration, purchasing a firm with complementary products or an adjacent service area. It’s important to thoroughly understand the business, its finances, and its culture. Sometimes you can get ideas by looking at how similar companies operating outside your town, region, or industry are innovating to accelerate business growth. Trade publications help identify innovators who might be willing to offer advice if they aren’t direct competitors. They may also share pitfalls you can learn from. You can often find great product and service innovations in other industries – and reimagine their ideas for your own products and services.
3. Carefully execute your plan
Once you’ve identified your best business growth opportunities, determine what you need to make them happen. You may need to improve processes, invest in technology or equipment, or develop new skills. For example, if you’re planning to serve an adjacent market that’s more upscale or sophisticated than your current customer base, you may need to retrain salespeople or offer a higher tier of customer service?
Key questions to ask include:
- What metrics will you track so you can make appropriate adjustments?
- Do current employees have the time and bandwidth for the plan, or will you need to hire people?
- Do you need specialists or nimble generalists who can play multiple roles and learn quickly?
4. Find the right funding
Business expansion costs money. Expansion planning should get folded into a business plan that you’ll take to potential investors, a business loan provider, or other financing source. Most small or mid-sized businesses require external capital to grow. Even if you intend to fund your own growth, it’s worth creating a plan as if you had to convince a sceptical lender. When it’s time to find funding, more options exist today than ever before. The right business credit or charge Cards offer short-term funding for new business growth opportunities, especially when those opportunities won’t last long. For example, a large contract bid might be awarded soon, requiring businesses to move quickly. Credit Cards are one example of unsecured lending, in which the lender evaluates the creditworthiness of a business but doesn’t have specific collateral in the event the business fails to repay. Other types of unsecured lending include fixed or floating rate business loans with varying maturity dates, as well as lines of credit and peer-to-peer lending via online platforms. Businesses may also fund expansion, acquisition, or large equipment purchases via secured loans. Here, the borrowing company pledges specific assets that may be taken by the lender if the borrower defaults. Sometimes small businesses that don’t have substantial physical or financial assets can pledge inventory or receivables as collateral. Don’t overlook government incentives to help fund your business growth, either. Sometimes there are strings attached, but they can make a helpful difference.
The takeaway
Small business growth is critical to the health of the Australian economy. Planning starts with defining your major goals for the year ahead and considering the macroeconomic backdrop, noting you'll probably need to revise the plan when necessary. Create a financial plan, ensuring you raise enough capital in cash flow and other funding to enable growth. Find ways to cut waste and properly allocate resources to make sure you can pursue your growth goals as planned. American Express is proud to support small business growth strategies through our Shop Small initiative. To find out more about how your business can get involved, visit the website.
1. Shop Small promotion commences 12:00am (AEDT) 1 November 2023 and closes 30 November 2023 at 11.59pm (AEDT). The Promoter is American Express Australia Limited. The draw will take place at Engage Australia Pty Ltd, 24 Washpool Crescent, Woongarrah NSW 2259, Australia at 2:30pm (AEDT) on Wednesday, 24 January 2024. Eligible American Express Shop Small Merchant Members are automatically enrolled in the Promotion Each American Express transaction processed by the Eligible Entrant during the Promotion Period is equivalent to one (1) entry for the Promotion. Each Eligible Entrant is eligible to win a maximum of one (1) prize only. There are ten (10) prizes to be won in total (each of which is a cash grant valued at AUD$10,000. The total prize pool is valued at AUD$100,000. The winners will be notified via email by Wednesday 31 January 2023. The Winners’ business name and state of trade will be published by Monday 1 February 2024. Authorised under NSW Permit No. TP/02813. ACT Permit No. TP 23/01384. SA Permit No. T23/1071 For full Terms and Conditions visit https://www.americanexpress.com/content/dam/amex/au/merchant/pdfs/shopsmallbusinessgrantcompetition.pdf
2. Promotions commences 9.00am (AEDT) 1 November 2023 and closes 30 November 2023 at 11.59pm (AEDT). The Promoter is American Express Australia Limited. The draw will take place at Engage Australia Pty Ltd, 24 Washpool Crescent, Woongarrah NSW 2259, Australia at 2:30pm (AEDT) on Wednesday, 10 January 2024. Entry is open to Eligible American Express Card Members who register for the competition on https://www.lyyti.in/amexshopsmall then spend AU$1 or more at a participating Shop Small business. The first ten Eligible Entrants to be drawn will each win a prize of 1 million Qantas, Velocity or Membership Reward points, depending on the loyalty program they are enrolled in. The winners will be notified by email by 18 January 2024 and their name will be published on Thursday 1 February 2024. Total Prize pool is up to AU$66,667 based on the value of points. Authorised under: NSW Authority Number: TP/02877; ACT Permit Number: TP 23/01629; SA Permit Number: T23/1261. For full Terms and Conditions visit https://www.americanexpress.com/en-au/benefits/shop-small/terms-and-conditions-2023/