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Posts Tagged ‘what is a small business’

Last week, on LinkedIn, I followed an interesting discussion on small business. The discussion was based on an article on the site of the National Journal was published under the title “Most small businesses do not want to grow.” The only entry was the smallest firms, especially those with fewer than 20 employees, are not interested in growing their business.

It seems that most participants agreed on the LinkedIn discussion that small businesses are not interested in growth. I do not agree. By working with small businesses of less than $ 500,000 in sales of up to 50 million dollars in sales, I can truly say I never someone who was not interested in growth occurred . However, they could see their growth objectives very different from what it is big business.

Large companies like this year after year, the steady increase in March sales and profits, to do with a ready explanation for the occasional hiccups. Assuming that growth does not come as a result of too much dilution of the base, this should result in a steady increase in stock prices and executive compensation. Small businesses, on the other side about their ability to put money in the bank to concentrate. Their understanding of the growth is continuous improvement in financial position and reduce the risk business and personal.

Growth is crucial for small businesses. But growth is not easy. The capital is very difficult to get and get a new loan from a bank is very difficult right now. Almost all small business loans on the personal guarantee of the principal shareholders, as a result, growth may actually increase their risk, while reducing business risk. Then there is the challenge, go to the market at large, strong competitors with big marketing budgets. No wonder that many small business owners are intimidated by the idea of ??growth. But if they are not small businesses grow, their profits are slowly eroded by inflation, or diluted with family members begin to disappear for lack of innovation.

So what do I do the small business owner?

For small companies, growth is difficult, intimidating, risky and necessary. There is no simple formula to do this and does not guarantee that it will come. On the other hand, can not grow your small business is always risky. Some ideas that can help small businesses start their engine of growth:

First understand your niche – Analyze your customers, customers who buy from you and why. Then you can adjust your marketing to this niche.

Second Identify sources of funding – Make an inventory of potential sources of funding you and costs. Remember that growth, even if it is just additional revenue from existing products or services will likely require additional working capital.

Third Assess industry trends – See what’s happening in your area. You probably do not want the “bleeding edge”, but would not be too far behind, either.

Fourth to “financial” decision – not the important business decisions on tax factors. If a single financial measure sentiment, but as much in taxes, you can not be interrupted.

Consider M 5th – sometimes two or more small businesses and a much stronger company internally. This is something we will discuss in more detail in a later post.

It’s not really a question of whether or not small businesses grow. Growth is important for small businesses, maintaining an acceptable level of business and personal risks. But in today’s business world, growth is increasingly difficult and intimidating than ever. Yet companies have succeeded in the past, are able to do it again.