For many small businesses, growth is the key to survival. However if this growth is not planned for, the business will be overwhelmed. The following five tips will help you to grow your business effectively and with limited risk.

  1. Determine your business metrics.

Before embarking on an expansion drive, you need to assess the current state of the business. You must establish a set of business metrics that will be measured before, during and after the expansion. Business metrics should be measurable, quantifiable over time and should have a significant impact on the business. Metrics should cover the financial, operations, customer and product development aspects of the business. Monthly cash flow is a financial business metric that is useful in identifying any cyclic trends in the business. Inventory turns is an operations metric that will help you keep track of how quickly inventory is moving out of the door. A web based business could measure conversion of site visits to actual purchases as a customer based business metric.

Armed with this data, you will fully understand where the business currently stands. You will know its strengths and weakness and can use this information to make better expansion plans.

  1. Expand your market.

It is much easier and more cost effective to entice current customers to buy more products than it is to get new customers. Get your current customers to buy more products and to buy those products more often. Provide incentives for repeat business and loyalty. Cultivate relationships with the current customers and offer them an outstanding customer experience.

You may also consider expanding your product range by offering products and services complimentary to your already existing products. Consider products that are a natural extension to your existing business. Also consider those products you could sell by leveraging your current business resources such as sales people and websites.

When you have total command of your current niche market, you may expand to a different niche. You may consider expanding to a different geographic location. This could be an expansion from being a local business to a regional business. Expansion can also be achieved by using a different product delivery channel. This could mean expansion from a conventional brick and mortar business to a web presence.

  1. Work smart not hard.

While it is important to work hard, it is even more important to work smart. Technology will help you get things done faster, easier and more efficiently. Technology may refer to computer hardware, software, online tools or gadgets. Depending on the nature of business, you may be able to take advantage of technology in all these categories or you may make use of just one category of technology. Before choosing what technology to buy, carefully consider what you will use it for and how you will use it. Select technology that best suites your needs.

When a realtor selects a new computer, it makes more sense to buy a laptop instead of a desktop since realtors generally spend much time on the road. The realtor can therefore carry his work with him everywhere.

Inventory software can help you keep track of your inventory while accounting software can help you streamline your accounting methods. PowerPoint presentations will make that sales presentation much more engaging. Most business software is designed to make it easy to gather data about your business and prepare the various business reports you will need during your expansion.

Smart phones will enable you to stay connected to your business at all times. With them, you can answer calls, pull up your calendar, look up business contacts and return email regardless of where you are.

  1. Increase awareness and demand.

In order to bring more business through the door, you need to generate more product awareness and demand. You can employ several techniques to increase product awareness and demand. These techniques include promotions, creative marketing, targeted marketing and networking.

Promotions can take various forms to suite different target audiences and to achieve different goals. Some promotions may be for greater brand and product awareness while some other promotions may be designed to generate sales leads. Whichever promotional form you take, consider creating a sense of urgency to it as this has been proven to work countless times.

With so much advertising going on, creative ideas are the key to being heard above this advertising background noise. Your adverts should stand out. Take a page from the Super Bowl ads playbook. Some are funny and many flirt with controversy but at the end of it all, we talk about them! Jar your audience and keep them talking.

  1. Acquire growth capital.

Business growth has to be financed somehow. Look for the least expensive way to finance this growth effectively. For small levels of financing, you could explain your expansion initiative to your suppliers and ask for an extension of your payment window. If you had a 30 day window, you could negotiate terms that allow you a 60 or 90 day window. You could then use the increase in cash on hand to expand your business and the supplier will benefit from your larger purchases.

If the business has valuable assets and collateral, the bank can be a good source of debt financing. For those companies that do not have physical assets but have a proven track record of profitability and positive cash flow, some lenders may be able to provide financing based on current and projected cash flows. This however generally requires an exceptionally good business relationship with the lender.

You may also consider financing from angel investors. These are retired business executives who are on the look out for young companies with potential for growth. Besides the financial backing, they are able to leverage their business contacts and industry knowledge to help the expanding company. They however may desire a greater say in the company’s operations.

If everything still looks good after laying out all your plans for the expansion, take the plunge and go for it. Grow your business and enjoy the journey.