Managing business growth is a challenge many companies face. Whether your growth is planned or occurs rapidly due to external factors, handling it well is critical to ensuring long-term success. From maintaining cash flow to addressing skills shortages, businesses must implement strategies that support sustainable growth.
This article explores how to manage business growth effectively and address expansion challenges, particularly for businesses in rapid growth phases.
What is business growth?
Business growth refers to the expansion and development of a company, whether through increased sales, market share, assets or workforce. So whilst growth generally signifies a positive trajectory, its meaning can vary significantly among different organisations depending upon their objectives.
Working capital specialist Neil Tunstall is the Managing Director at Thane Commercial. He highlights that the motivations behind business growth can vary. “There are so many different factors that impact every business, and each one is different. What are the objectives of the owners? Are they looking to create a very successful large organisation, or are they more comfortable with slower and more gradual growth?”
Neil advises businesses to take a strategic approach to achieve sustainable business growth. “Make sure you are working with your advisors and accountants, and put intellectual effort into forecasting,” says Neil. “Don’t just say we’ll grow by 10%; it needs to be strategic.”
Managing sustainable business growth involves setting clear objectives, understanding market dynamics and collaborating with financial experts to create a well-informed growth plan that aligns with the business’s unique vision and goals.
So, why is growth important in business? Growth is essential because it can contribute to profitability, increased market share and more competitive advantage. It allows businesses to innovate, expand offerings and attract investment. Sustainable growth fosters resilience, helping companies adapt to market changes while enhancing their long-term stability and success.
What is a good percentage for business growth?
A good business growth percentage varies depending on factors like economic growth, industry, company size and maturity. For many companies, an annual growth rate of 10% to 15% is considered strong and a particularly good growth rate for small to mid-sized businesses.
How to sustain business growth
Managing business growth can indeed be a challenging endeavour. To ensure sustainable growth, adopting a clear and actionable framework is essential. The following steps are a roadmap for how to manage growth in business:
- Set clear and achievable goals: Defining realistic objectives aligned with your business resources is crucial for maintaining focus. Neil says, “Businesses need to be looking two to three to four years out, creating a roadmap with forecasting that includes the right structures.” This foresight allows organisations to plan their growth trajectory strategically.
- Train and develop your team: Equipping staff with the necessary skills to handle increased workloads and embrace new technologies is vital for sustainable growth. Neil says, “A big part of growth is looking at how businesses grow their staff or people, so they come along the journey with them.” Investing in your team ensures they are prepared to contribute effectively to the business’ expanding needs. It’s also important to extend the team to also include key advisors and business partners when necessary.
- Leverage financial management tools: Effective budgeting and forecasting tools are essential for managing cash flow and growth capital. Neil says, “You’ve got to make sure that the business has the runway to meet its growing demands.” By using these tools, you can learn how to sustain growth in business and make informed financial decisions that support your growth objectives.
- Invest in technology: Digital transformation is essential for business growth because technology enhances efficiency and productivity. Neil advises, “Businesses should visit industry expos and actively engage with industry bodies to see what their competitors are doing to keep up with technological advancements.” Embracing digital and technical transformation enables companies to adapt and innovate in a rapidly changing market. It’s also important to understand how digital marketing helps in business growth.
- Manage your supply chain: Ensuring your supply chain can handle increased demand without bottlenecks is critical for sustaining growth. Neil stresses the importance of evaluating supplier relationships: “What are the terms we’re getting from suppliers? Do we have the right structures in place to grow and meet obligations as they fall due?” A robust supply chain management strategy is essential to effectively meeting customer demands. Knowing how customer experience drives business growth is vital.
By following these steps, businesses can create a solid foundation for sustainable growth.
Leveraging working capital finance
Achieving business growth requires adequate funding, and leveraging tailored working capital solutions can support expansion without straining cash flow. Octet offers several solutions that can help businesses navigate the complexities of growth while maintaining financial stability. Here are three to consider:
- Trade Finance: This form of working capital finance helps businesses manage cash flow during expansion by accelerating their supply chain and payment terms. Neil emphasises the benefits of trade finance, saying, “With Octet’s Trade Finance, businesses have the capacity to fund their full trading cycle, ensuring sustainable growth.” By providing immediate capital for inventory purchases and operational expenses, trade finance can bridge the gap between cash outflows and inflows, enabling businesses to seize growth opportunities
- Debtor Finance: By unlocking cash tied up in unpaid invoices, debtor finance (also known as invoice finance) offers businesses immediate liquidity to fund growth operations. Neil notes that Octet’s Debtor Finance product is designed to be low-touch for clients: “This allows them to plan growth over the next 12 to 18 months without constantly revisiting credit approvals.” By accessing funds tied up in outstanding invoices through debtor finance, businesses can alleviate cash flow constraints and invest in initiatives that drive expansion.
- Term Loan: Octet’s Term Loan is designed to help businesses secure the funds they need to grow. Available with flexible terms ranging from three months to three years, this loan allows businesses to borrow up to $2 million. It’s tailored for both short-term needs, such as bridging cash flow gaps, and long-term investments, like expanding operations or purchasing equipment. With a fast approval process and competitive rates, businesses can manage their finances with greater control and predictability.
Integrating these financial products into a comprehensive business growth framework can help overcome common business growth barriers and navigate the advantages and disadvantages of business growth. This allows companies to thrive and expand in today’s competitive market.
Learn more about how to maintain business growth with Octet
Sustainable business growth is achievable through strategic planning, team development and the effective use of working capital finance. By partnering with Octet, businesses can access the financial support necessary to navigate the key challenges of business growth and capitalise on opportunities, ensuring a thriving and sustainable growth trajectory.
Contact us today for more information on how Octet can power your business growth.
Neil Tunstall is the Founder and Managing Director at Thane Commercial with over 40 years expertise in the banking and finance industry. Specialising in working capital solutions, Neil has built a reputation for delivering strategic financial services, particularly in debtor and trade finance.
Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.
