Building and running a business is neither a sprint nor a marathon -- it's a decathlon. What you need to be good at varies day to day.
Just like in a decathlon, you'll encounter both slow and fast periods when it comes to your business's progress and growth. This may be related to internal or external factors, a new type of technology, or simply a change in your attitude. But your long-term success as a business depends on how you handle both the peaks and the valleys.
As is often said, success boils down to preparation. Your business should be prepared for downturns, but it's equally important to set yourself up for an upswing. So whether you're considering opening a new location or about to sign onto a major new partnership, how do you know for sure that your business is ready to take it to the next level?
Here are three signs that you're ready to take the next big step:
1. Your business is stable and prospering.
Any type of expansion will bring a fresh set of challenges and risks. In order to weather a potential storm, you've got to ensure you have the basics down pat and a foundation upon which you can build. This means your cash flow is stable, you're staffed with the right people, your margins are sustainable, your brand is healthy, and you have a solid framework of policies and processes in place.
2. You have a specific goal in mind.
When business owners come to us at Funding Circle for a small business loan, one of the most important things we ask about is how they're going to use the funds. They're usually all too happy to share their plans for hiring new employees or investing in new equipment. If a business owner can't articulate a goal, it's often a sign they aren't ready for the financing they're seeking. Whether or not you're seeking capital for your growth, it will never happen unless you can outline your specific goals and an action plan to get there.
3. You have the resources to support this growth.
If you want to grow, you need to be prepared for new expenses -- some anticipated, some not. Until the changes you've made result in new revenue, these expenses must be covered by your current cash flow, or through external financing such as a loan or investor. Beyond just money, growth will also require other types of resources like staff, inventory, and your time. Your plans and timelines must be aligned with the availability of all these resources in a realistic way.
So is this the right time to launch that online marketing campaign you've been thinking about, or to open that new storefront across town? Success can never be guaranteed, but you're certain to fail unless these three fundamentals are in place.