After launching your business and it is starting to generate some revenue, you are now ready to expand and grow beyond its current status — to its full potential. Depending on your business type, there are several ways to undertake. Below are some suggestions for each area of the business.
- Complementary Good
A complimentary good is that the use of a good is related to the use of an associated good. i.e. higher demand for A, resulting in higher demand for B.
Your business needs to have a strategy in place to ensure that your service/good are complimenting other service/good and vice versa. For example, Apple iPhone created complimentary goods by offering global developers to build applications which can be run on iPhone. This in turns make the iPhone becoming a more attractive product.
- Network Effects
It is the effect that one user of a good or service has on the value of that product to other people. When a network effect is present, the value of a product or service is dependent on the number of others using it . For example, the more people joins Facebook online site, it becomes more valuable and more attractive for other users to join the service.
Having a top notch product with the biggest market will not bring the business to the next level. The profit margin must be thought out carefully to allow the business to grow (i.e. not too high that will push away potential clients, or too low that the margin does not cover the cost).
- Partnership with Supplier
Ability to form a partnership with your supplier to help each other grow will allow the product quality to increase and cost to go down, which ultimately increase end customer’s satisfaction and results in higher revenue.
- Cash Flow
Ensure the business has strong Cash Flow to ensure all immediate expenses are met and able to deploy cash to expand your business, whether it is a new site, new factory, new orders or having a larger pool of resources. For great tips on how to improve your Cash Flow, please see our prior article — “Top 10 tips- improving your Cash Flow”
Ensure all your cash is working even when it is not being used to grow your business by selecting and deploying it to the right investment
Attract the best
All businesses can only grow if the right people are deployed. Finding the right resource for your company with limited resource is always tricky and really there is no shortcut.
- Retain your best employees
The company should do everything possible to retain your best employees (without jeopardising the business). Equity share incentive usually works best but should only be given to the top performers who are key to the growth of the business.
Nalinee Chinowuthichai is the co-founder of InvoiceInterchange, Singapore’s invoice trading platform, where SMEs can flexibly manage their cash flow by selling invoices to a network of investors who compete to provide cash advances.