How To Grow a Small Business?

Grow a Small Business

For a very small company (VSE), growth is a big challenge. The main obstacles that stand in its way are usually lack of time and resources. How to succeed despite everything?

 The statistics are clear: 73% of bankruptcies result from a lack of vision. “Many companies are disappearing because they followed what they thought were good ideas and they chose business opportunities that took them away from their goal,” says André Menand, Director of Specialized Services. business growth with the organization SAJE Accompagnateur d’entrepreneurs. In such a context, orchestrating its growth is the nerve of war.

Steps to follow

In a very small organization, the contractor usually works alone or has few employees. Its financial means are also limited, hence the difficulty of expanding. “To grow, we must find profitable activities, both in terms of time and money, transferable to another member of his team and are controllable,” says André Menand. In other words, you have to find a “cash cow”!

This could be for example a paying contract with a regular customer, which does not require financial investments or excessive human resources. Once done, the entrepreneur will be able to free up the time and money needed to develop his business. André Menand indicates that the experience of SAJE Accompanied entrepreneurs has developed a decade ago a growth model for TPE-SME named “The wheel of growth”. “This wheel details the different stages that companies typically go through during their growth. It has four distinct phases, which have different issues. The first is to enter the market,

Second step, make the market more profitable, that is to say, be more selective and focus on the most profitable customers and products. At the same time, processes must be optimized to reduce costs and increase profit margins.

The third phase is to maximize sales to customers by analyzing their needs and working to better meet them, possibly by developing related products. “For example, we could think of a contractor who cares for turf and who would associate with a subcontractor specialized in patio painting,” says André Menand.

Finally, fourth and last phase: the entrepreneur can, if he wishes, continue his growth and position himself in new markets. However, he can think of doing so only to the extent that his business runs on his own, because he has delegated the maximum of operational tasks to his employees and his collaborators. “At this point, he has the time and resources to explore other possibilities,” says André Menand.

Anabela Neves, Senior Director, Montreal Small Business Market, says that one of the fundamental elements for a successful growth is the implementation of a strategic plan based on a solid business model. “This is the very foundation of questioning: how do I position myself as an entrepreneur, what do I want to accomplish, etc.? If we respect this plan and update it regularly according to the achievement of objectives and obstacles encountered, then we put all the chances on its side, “she says.

Common mistakes to avoid

Among the mistakes often made by entrepreneurs and which make them miss their growth objective, André Menand mentions the fact of not having a precise vision of his activities, and consequently, of being unable to develop a clear business strategy. . “When we know where we are going, we also know what business opportunities are worth exploring and exploiting, and which are best left out,” he says.

If he has not properly analyzed a business opportunity presented to him, an entrepreneur can also make a decision that ultimately will be fatal. “For example, signing a contract with a retail giant may seem attractive, but in fact, such a contract could be very difficult to meet,” says Neves. Thus, the requirements of a Walmart or a Costco are very high in terms of product quality, and the payment terms are also very long, which will have an impact on cash flow. “You have to be strong enough to be able to support 90 days before you get paid. Without a safety net, it can be bad for the business, “says Neves.

The wise entrepreneur will have to examine the offer made to him before accepting it and not be blinded by a contract that seems very attractive at first glance. Do not rush, avoid impulsive decisions and wonder if this is the right time: here are the good ingredients to achieve balanced growth

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