Once you’ve successfully made it through phases four and five of entrepreneurship (operating and monitoring, then resolving problems and challenges), it’s time to take a deep breath and enter phase six – renewal and expansion.
It will have taken a lot of hard work ‘at the coal face’ to set your business up and get it consistently operating at its best. You now need to take a step back, take stock and set your sights on more than just the immediate future.
There’s no set time at which it’s right to enter this phase, but the British Business Bank’s partner, the Start Up Loans Company, only offers loans to businesses that have been trading for less than two years – an indication that after two years a business is no longer considered (at least by some) as a start-up, but is seen as more mature, and perhaps more resilient.
An Example Of Renewal
In February 2016, the Flying Scotsman returned to the British railways following a restoration that cost more than £4 million. It’s a perfect example of renewal. According to the National Railway Museum, “over the course of its 90-plus year history as a working locomotive, parts have been replaced at every overhaul.”
As to the question of how much of it is original, their answer is “not much.” But they go on to add: “Perhaps most importantly there’s the name itself. With the same basic outline and the associations that it has built up over nearly a century, and the history which it continues to write.”
In short, the individual parts may have all been repaired or upgraded, but this is still the Flying Scotsman.
Renewing Your Own Business
Like the famous locomotive, your business has various elements that drive it forward and renewal is about looking at each of these and seeing whether it needs replacing or improving to keep you on track.
This isn’t about solving immediate problems – as an existing business with ‘lived experience’, now is the time to use all the lessons you’ve learned along the way to create a refreshed and reinvigorated business.
The elements to look at include your structure, your products and how you deliver them, and how your business can be updated to meet current customer needs and market conditions.
Revisit your staffing structure – is your top team working well? Do you have the right numbers of staff in each team and are they delivering the goods?
Update your market research to check on how your products are being received – are they still popular or are they getting ‘stale’ and in need of refreshing?
Now is also a good time to consider possible expansion and diversification with new product developments or entry into new markets. Check whether you have any new competitors and whether you are holding your market share.
And don’t forget the nitty-gritty such as loans, leases and service agreements that you have with suppliers. Review each of these to see what’s working well and what could be better.
Your overall business plan will have a lifecycle of a specific number of years. While you should be constantly checking it against forecast, during phase six make sure that you give it a proper review well before it expires. Make sure that the next iteration is even better than the last, building on your achievements, setting stretch targets and driving your company to even greater success.
Expanding Your Business
The process of renewal may highlight areas for expansion – and realistically, like any national economy, all businesses need to grow. Standing still is not an option, because as everyone else moves forward around you, you might as well be going backwards.
Expansion can come in various forms – of your product range, your production levels, your geographic territory and so on – and all need to be mapped out in the same detail as the plans you initially made when developing your new business.
This means updating your business plan and your forecasts, expanding your marketing strategy to include any new market areas or geographic territories, and checking that your systems – such as IT, telephony, distribution and customer service – are able to handle an increased demand.
You may even need to move to larger premises, or consider changing your production methods to handle larger quantities. Expansion can mean the difference between running the back office out of your study with the product stored in a local lock-up, and renting a suite of offices and taking on a contract with a manufacturer and distributor.
Expansion is a big step that you need to be ready for, and many entrepreneurs will need a cash injection to fund it, no matter how good the books look. It’s perhaps a leap of faith, and possibly the first time you will have needed a capital investment.
We looked at the many financing options available in phase five, and they’re still all relevant at this stage. Your updated business plans and forecasts will be crucial to you winning any investment; as all potential investors will know, if you try to expand too far and too fast you will most likely get into difficulty. Your expansion plans must be measured and realistic – but at the same time optimistic and worth the investment of time and money!
Keep an eye on your customer service as your expansion plans get underway to ensure that any new developments don’t negatively impact on your core business, and remember to monitor social and traditional media for what people are saying.
Carry on with your networking, as other local businesses or colleagues in the industry may have lessons to share about their own experience of growing their business or even ideas about local premises that may suit you. The local Chamber of Commerce may also be aware of grants to support business growth, or areas targeted for development that offer incentives for businesses to relocate.
After all that work – and when you feel the time is right – you can enter phase seven of entrepreneurship: selling, transferring or retirement. This may sound like an ending, but for most entrepreneurs this will be the most exciting phase – implementing an exit strategy that will allow you to either sit back and enjoy the fruits of your labour, or start the entire process afresh with a brand new idea.