Most small businesses start off with a simple idea and a need to be one’s own boss. The idea of becoming your own boss and being able to make decisions for yourself is an often enticing for those in search of making a living off their own skills and abilities. While the life of an entrepreneur seems straight forward at the start it quickly turns into a practice of responsibility, wise spending, and the ability to read the industry and act accordingly.
The greatest mistake most small businesses make in the long-run is not looking towards their future. As most businesses are prepared for the now, less businesses are looking for ways to grow out their small business over the next three to five years. One of the greatest tools a small business can have is a plan for growth over the long term. While many businesses have the difficulty of being unable to foresee what the future brings, it is always essential to have a plan of action and a goal set over the next few years for the business.
Setting a Realistic Goal
A truly dedicated business owner is constantly looking for ways to improve their business. Whether it is making their workforce more efficient, finding ways to reduce costs, or finding ways to maximize the potential of their current assets there are a large number of strategies that small business owners use to get the most out of their investment. At the end of the day most small businesses are an investment on the part of the owner with a hope of growing the business larger than it is. With a steady business and a growing income, it is possible for many businesses to grow.
In order to grow, it is important to set goals for the business for both the short term and the long term. A short term goal usually involves aiming to provide a new product or service to customers or setting a goal for revenues based around a growing demand of something. Long-term goals often relate to annual income, reaching a new target demographic, or finding new ways to profit off of an existing audience which would normally be unobtainable. Whatever the goal is, there needs to be a clear plan of action as a way to reach the goal.
The goal is needs to be realistic. Many business owners set a goal for reaching an annual revenue of 1M USD or a number completely outside of their reaching given their means. While some businesses flourish through taking advantage of a perfect storm, it is highly unlikely for a business to experience a large growth over a short period of time. In the business world three months is a very short period of time and years are counted like sands in the hour glass. It is important to create realistic goals based on past performance and what is realistically obtainable.
The Financial Side
The financial side of setting goals and accomplishing them can be one of the most limiting factors of creating a realistic goal for the future. While a business can be quite profitable, it can still be hard to figure out how to properly expand a business. The idea of expansion is often met with fear as there is never certainty to whether expanding into a new market or location will bring in additional revenue and profit over the short-term and long-term respectively. At the end of the day it is a constant challenge for balancing finances and attempting to pay the costs associated with expansion.
Financial assistance is a concept most often scoffed at by small business owners which are determined to not incur any additional debt as a result of expansion. This is often a down fall of many businesses who are not able to make that delicate balance of profit and expansion. You either make a decent profit or you expand and incur losses. Or you look into financial assistance.
Financial assistance can be found in the form of small business loans. Many banks offer small business loans backed by the United States Small Business Administration. These are loans that are made to be particularly accessible for small businesses for the operation and expansion of a business. There are different loans that provide businesses with various payment terms, interest rates, and levels of flexibility on how the loaned funds can be used. It is important to understand just how small business loans can be used and how they relate to the goals of the business.
Looking forward to the expansion of a business is an important step that most business owners either refuse to look at or are completely oblivious to. It is a scary thought for many but is often a necessary step to take to ensure the livelihood of a business. While no business owner wants to operate at a loss, an expansion is an investment into the future of a business and is additional assurance during times of economic turmoil to ensure that the business can survive in the case of downsizing. More revenues means access to more resources to survive during the toughest of times.