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New Business Trends  Working From Home
Grow Your Home Business
There comes a time in the life of every home-based business owner when he or she has to make a decision whether or not to grow the business. If you're good at what you do, and your customers love the products and services that you sell them, don’t be surprised if, after you start your business, you're soon faced with more customers and clients than you can handle.
At that point you have to make a conscious decision: reject this extra work and maintain the status quo, or take on the extra work and grow. For many home-based business owners, this isn't even a question. For them, being in business means growing the business, pure and simple. For others, however, the prospect of growth is something they prefer to avoid - they're comfortable with things as they are and have made a decision to spend less time working and more time with family and friends, or have any of a thousand different reasons why growth is not something that holds an attraction for them.
Well, the right answer is the one that's best for you. And what's best for you may or may not be what's best for your clients and customers, your family and friends, and any employees or contractors you may have.
In this article, we consider what makes a business a success, and the good and the bad news about owning a growing company. We take a close look at both bringing partners into your business and expanding your operations. Finally, we explore strategies for selling your business and moving on to other opportunities.
Becoming a Success
Success is a relative thing. While one home-based business owner may be pulling a smaller salary and considering herself a smashing success while enjoying lots of time with family and friends, another may consider a minimal level of income to be an indication of failure. As the owner of a home-based business, you get to decide how to define what success means to you. You may measure success in terms of money, or in terms of how many clients you can help. You may also measure success on your ability to achieve an equal balance in your work life and your personal life. The definition is up to you.
After defining what success means to you, however, you have to have a strategy for achieving the goals you've set. While anyone who puts his or her mind to it will find some measure of success, starting up a successful enterprise involves more than just that.
Identifying the Upside (And Downside) of Growth
The concept (and the reality) of business growth has ramifications that extend far beyond the simple day-to-day running of an organisation.
· Growth means new work, new clients, and new opportunities.
· Growth means more money coming into your business, but it also means more money going out.
· Running a growing business can make your life incredibly busy and hectic, but it can also be incredibly rewarding – both financially and personally.
What are your long-term goals for you and for your business? How much revenue? How many customers? How much profit? What kind of work schedule? When would you like to retire? If you decide that growth is indeed a long-term goal for your business, you can't leave it to chance - you have to have a plan to get there. And don't forget that your business will change, as will your feelings about it. Be flexible and prepared to change your plans as your goals themselves change.
Growth is both good and bad. In the following sections, we explore growth so that you can decide what growth means to you, and decide whether you'd rather grow or maintain the status quo.
Understanding why you may want to grow
Although the pressure to grow seems inevitable for many businesses, especially businesses that do a good job for their customers and clients - growth is something that you can ultimately directly control. Too many clients? Trim back your client list. Too much work? Turn down new work until you catch up. Not enough time for yourself? Make time for yourself. You're in charge, you're the boss.
So, why grow? Here are a number of good reasons:
· Increased revenue and profits: The immediate impact of growing your business is an increase in revenues and, as long as costs don't grow out of proportion, an increase in profit. Hey - that's not a bad thing, is it?
· Building equity: Equity is the difference between the value of your business, cash and assets, and the amount of money you could get if you sold the business to someone else. Growing your business is likely to grow your equity as well.
· Take advantage of economies of scale: The larger your business, the more you can take advantage of economies of scale.
· Why not? In the absence of any compelling reasons not to grow, why not grow? Growth can be exciting and fun, and it may be profitable too.
Of course, it's okay not to grow, if that's the way you decide to run your business and your life. Many people have become home-based business owners for just that reason - to get off of the never-ending treadmill of business that devours their personal lives.
Recognising the many different ways to grow
If you've made the decision to grow your business, you have a number of ways to do just that. The exact approach depends on your goals and plans and the nature of your business. The following are some of the most common approaches for growing a home-based business:
· Expand beyond your locale. Expanding beyond your locale dramatically increases the number of potential clients and customers available to you - potentially increasing sales and profits.
· Get on the web. With the right internet presence, the number of people who view your product catalogue or see your work can mushroom. Many home-based businesses have seen tremendous growth after capturing the imagination of customers via the internet.
· Go international. It's a great big world out there and, depending on the products and services you sell, a huge, unserved international market may be waiting for you to tap in. For many growing businesses, a plan for expanding into international markets is a key success strategy.
· Expand your product line. If you currently carry ten different products, and you want to double your business, what's the quickest way to achieve your goal? Carry 20 different products! While the exact impact of that decision ultimately depends on products, their pricing and the extent to which you promote them, expanding your product line is a quick and easy way to grow your business.
· Add employees. Adding employees to your business by definition means that you're growing it. As long as you're also increasing your revenues to cover the added labour cost, adding employees is a great way to grow your company. If your revenues are flat or decreasing as you add employees, you have what's commonly known as a going-out-of-business plan.
You know your business better than anyone else, so think about what you can do to grow your business. One of the benefits of being your own boss is that you can do whatever you like with your business, whenever you want. Think you have a good idea? Give it a try. The more you experiment, the higher the probability that you'll find something that works in the end!
Making growth choices
If you've agonised over the decision to grow your business or not, you know that it isn't just a business decision - it's also a personal. Because you're the one who has to live with the consequences of the decision to grow or not to grow, it's in your interest to thoroughly examine yourself, your business and the marketplace to make sure that, whatever your decision, it's the best one for you and for your business.
Here are four key places to look as you consider whether or not to grow your business:
· Check your heart. The first place to look when you're thinking about growing your business is deep inside your heart. Take some time to get away from the hustle and bustle of your business and really listen to what your heart tells you. What does it say?
· Check your lifestyle. Will your preferred lifestyle support or be in conflict with the growth of your business? If, for example, the growth of your business will take you away from your family and you have always considered family to be the most important thing in your life, you'll likely resent the extra time you have to devote to your business - as will your family, who will have less of your time.
· Check the numbers. Of course, your heart may say "go" and your lifestyle may say "go" too, but if the numbers don't make sense – if sales are too low or costs are too high - growing your business isn't the best thing to do. Can you somehow increase sales or decrease costs for growth to make sense? If yes, great! If not, put your growth plans on the back burner until the numbers make sense.
· Check the market. Have you ever thrown a party and no-one showed up? That can happen to your business if you're ready to grow but the marketplace isn't ready for you to grow. Before you invest lots of time, money and effort in growing your business, first be sure that enough potential customers and clients are interested in buying your products and services.
All of these factors play a role in the growth decision; the weight that you place on each depends on your own personal desires and goals. Many businesses have succeeded, for example, when the numbers didn't make sense, but behind businesses like these there have been incredibly motivated and hard-working business owners.
Bringing in Partners
A partnership is when two or more people team up in the ownership and operation of a business. Several large, well-known businesses have started out as successful partnerships (home-based businesses too), such between as Microsoft's Bill Gates and Paul Allen; the Disney brothers, Walt and Roy; ice cream impresarios Ben Cohen and Jerry Greenfield. While these businesses quickly outgrew their original partnership structures - eventually becoming corporations - the combination of the original partners sparked an incredible amount of creativity and energy.
If a partnership works, the business will run like a well-played symphony. If it doesn't work, it's more likely to be closer to a catfight or scene from the film Titanic. Unfortunately, you can't really know how things will turn out until a partnership is actually created and partners begin to work together. It's a bit like a marriage - you really don't know how things are going to turn out until the honeymoon is over.
More than a few friendships, families, and personal relationships have been destroyed by partnerships gone bad. Partners can clash in a variety of ways, and these clashes may only occur in a business environment under the pressures of a busy schedule. That's why you should always apply the same decision-making strategies whether you decide to partner with family/friends or with a stranger.
The following are tips for ensuring that your partnerships operate smoothly.
· Date first. Before you get married, you want to date for a while first. Not only does this give you time to develop trust and to find out how to communicate with one another, but it allows you to see the good and the bad sides of your partner. Business partnerships work the same way: Get to know your prospective partner well before you tie the knot. Consider doing shared marketing or a specific project together first.
· Partner only with someone you trust. Trust is the glue that holds a partnership together and enables you to achieve great things. Don't even consider partnering with someone you don't trust.
· Don't partner until you can stand on your own. You should partner from a position of strength, not weakness, otherwise your business will become a co-dependency, and thus dysfunctional. And a dysfunctional company is a company that's going to have problems serving its customers well and making money.
· Enlist partners who add to the business. You don't want a partner who is there just as a source of cash; you want someone who will compliment you and bring positive personal value to the company. Just as you should hire employees that shore up your weaknesses, choose partners to cover the skills or connections that you lack.
· Share the equity (and the burden of risk). Sharing equity means sharing ownership of the company with your partners. If you don't share ownership with your partners, you can be sure that they will resent it. At the same time, if you agree to share ownership of your company, be sure to require your partners to share equally in the risks associated with the business.
· Create a written partnership agreement. Formalise your partnership with a written agreement that spells out - clearly and unambiguously - the ownership stake of each partner, rights to business proceeds, and responsibilities to the business.
Follow these tips and your partnerships should be happy ones. If not, you can always split up the partnership and try again, but you'll have a much easier (and more profitable) time by doing your homework and getting it right the first time.
Source : Home-based Business for Dummies by Paul and Sarah Edwards and Peter Economy, 2000.
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section specialist
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Jaqueline Martinez
Jaqueline studied Public Relations and Journalism at CPUT between 2001 and 2003. She completed Information Systems and Communication Science 101 at Unisa. She teethed on business journalism as a communication specialist with Old Mutual for several years. Jaqueline travelled to Asia and the US teaching English before returning to South Africa and finding her niche as an online editor and features writer with BizAssist Technologies and SA Guide to Business Opportunities. |
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