Business growth can be achieved either organically or through the acquisition of similar or complementary businesses.
Organic growth may include initiatives such as a new marketing campaign to increase market share, developing a strong team of employees to improve quality, or perhaps opening another office in a different location. This method usually benefits from fewer significant upfront costs and allows the business owner to maintain a higher degree of control throughout. However, it is generally considered to be the slower approach and often takes years to implement.
Growth through acquisition can allow a business to double in size overnight. The acquisition of a complementary business may provide cross selling opportunities to an existing client base and result in synergistic benefits such as a reduction in costs. However difficulties with integration, poor planning or underestimating the business challenges can create problems post acquisition.
Before choosing any growth strategy a business owner should have a good understanding of their mid to long term plan e.g. where they want the business to be in the next 5-10 years.
Either strategy will need financial investment whether this is for increased working capital requirements or a lump sum to buy another business. It is a common misconception that a business must already have the cash in the bank to pursue growth. Often the funds can be raised from a bank or other investor on the back of a solid business plan and detailed financial forecasts.
Where a business is considering growth through either strategy, professional advice should be sought in order to gain a thorough understanding of the various options available.
For more advice on how to grow your business as an SME contact our Accountants Bolton by clicking here at CHW small business accounting.
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