Growth Strategy Defining Factor in Small Business Success, Funding Specialists Say
Leading factoring company Charter Capital wants business owners to focus on their growth strategies going into the third quarter. Drawing on McKinsey research, company representatives say just one in five businesses scale, but nearly two-thirds could level up by adjusting their approach.
Business owners need to look beyond their brand, products, and services, explains Joel Rosenthal, Co-Founder and Executive Manager of Charter Capital. While these are the building blocks of successful businesses, it’s the growth strategy setting industry leaders apart.
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“People are passionate about the businesses they create and often start engaging in all sorts of growth activities at once,” Rosenthal says. “The problem with this approach is that it spreads the business too thin and dilutes resources, so growth in any one area is modest at best.”
To create measurable results, businesses with finite resources must focus on a single expansion strategy at a time, such as market development, market penetration, or product expansion. Once researched and tested, all development activities can then be built around the selected model, serving as a firmer foundation for growth.
“Oftentimes, we see business owners creating goals before they’ve chosen a model or researched the viability of their strategy,” expands Rosenthal. “You need to understand the purpose or methodology before you set goals though. Maybe you can double your sales or increase active customers by 25 percent, but you must do the work beforehand to see where this growth can potentially come from.”
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Mapping out end-to-end resources is an essential step too. In addition to identifying the non-negotiable resources required to carry out tasks related to the goal, business owners are encouraged to create a list of helpful resources that will allow the team to work more efficiently, grow the business faster, and address issues along the way.
“Raw resources, supplies, tools, and equipment are generally at the forefront of minds,” Rosenthal notes. “However, funding, especially back-up funding, as well as professional service providers such as lawyers or consultants are often overlooked.”
Invoice factoring can play a key role in business growth strategies contends Rosenthal. When companies need a quick cash injection to kick off their plans or money runs tight during execution, they can tap into their unpaid B2B invoices to get things moving.
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