Plants, growing Plants, growing

It’s well known that SMEs are the backbone of the UK economy. But with so much going on, it can be challenging for business owners to take a step back and realise when their business is on the cusp of growth. Here, Steve Noble, Chief Operating Officer, Ultimate Finance, reveals the signs to look out for…

You certainly need to be resilient as a small business owner. There are so many aspects to running a business and, no matter what happens, you’ve just got to keep the balls in the air and keep your customers happy. With multiple decisions to make every day, cash flow to manage, staff to motivate and deadlines to meet, it’s easy for the worry to build up.

Often what keeps small business owners going through thick and thin is the simple belief that they are good at what they do and have a proposition with the potential to really succeed. We have a vibrant entrepreneurial spirit in the UK – more than 650,000 new businesses started up in 2016 according to the Centre for Entrepreneurs, a new record. It’s people having belief in their ideas and the courage to make them a reality that fuels this start-up culture.

Success is not likely to come easily. It takes considerable time, effort and resource to build a business. Until the company has reached a point where it can afford to take on its first employee or rent some office space, it can often be a ‘one man (or woman) band’ – with the owner filling every role from CEO to front-of-house in the early days.

Growing pains

For some business owners, they are absolutely happy to operate as a small or micro business. But for others, they’re keen to grow the business and extend their operations. Growth is the logical next step – but it can seem quite intimidating.

It’s also quite easy to put off. It’s something that can be put in the ‘nice to do’ box while the owner carries on as they are and ignores the signs that their business has reached the point where it needs to move to the next stage.

In my experience, there are a number of ‘tipping points’ that can indicate a business is beginning to outgrow itself such that it could be time for the owner to seriously consider making changes to allow the company to grow and enter the next phase of its existence.

Here are some common growing pains symptoms for small businesses:

  1. You’re having to turn down work
If your business is doing so well that you can’t fit all the work in then it’s probably time to do something about it. It may seem like a nice problem to have, but if you turn down a new customer you could live to regret it further down the line if the pipeline unexpectedly dries up. Similarly, if you tell an existing customer that you can’t take on an extra piece of work for them, even if they’re nice about it there’s a risk they could go elsewhere – and start to give all of their work to someone else.

This is the time to go back to your business plan and assess your growth plans and aspirations. Do you need to take on more staff? Change your business model? No business should be standing still.

  1. Your balance sheet is good but you’re working flat out
We see this very frequently. Your business is doing well and your finances feel in order but what should be a happy time is fraught with anxiety because you’re struggling to keep up with demand and don’t have any time to enjoy it. A degree of stress is to be expected in running your own business, but if it gets to the point where your physical or mental health is suffering then alarm bells should be ringing. This could be a good time to seek out a mentor or business associate who understands the position you’re in and can help give you advice on maintaining a healthy work/life balance.
  1. Your current premises (kitchen table?) are no longer fit for purpose
It’s another classic scenario – the business that starts out from someone’s kitchen table or spare room and then slowly grows until it’s taking over the whole house! Maybe you need more storage space. Maybe you need a quieter space away from the family for those important phone calls or web meetings. Or if you’re already in an office, maybe it’s become too small or the location just isn’t working. These are all things that shouldn’t be put off indefinitely – they’re a sign that your success means you are outgrowing your initial formation.

Moving the business on

If any of these ‘symptoms’ feel familiar, then it could be time to think seriously about expanding your business. This can seem a little scary, but there is plenty of advice and help out there, particularly when it comes to financing an expansion.

Funding can be the key to growth. Finding a partner that’s right for you can help you move your business on and boost both your wellbeing and your bottom line.