If you are searching for this, you already have started your business activity. So far, you’ve been running your business with your own equity and with plough-backs from the business. So, let’s start with what you need to do after your idea is successful and you need to expand now. Here’s a step by step approach you can follow:
Step 1: Dissect Your Business into Smaller Pieces
Put straight; this means your broad idea needs to be dissected into smaller, actionable pieces. For example, if you are running a manufacturing setup, you need to figure out:
- Raw material required (quantity, quality parameters)
- Location of setup (pros and cons, business needs, customer base,)
- How will the operations be financed?
- How to send the goods to the consumers?
- The kind of machinery required
- How many and skilled/unskilled workforce needed, and so on…
Step 2: Organize all Pieces in a Detailed Business Plan
Once you have most of the information above, start piecing together an actionable business expansion plan. Remember the word “actionable” for most of the planning, as anything that is non-actionable can become a hindrance in the execution of your business plan.
The best business plans are clear to understand and have a flow similar to the real business activity. You will need to get out and study the similar businesses already running. By now you understand the industry practices, and from here fit in your concept.
You can also check the feasibility of your concept if your business offers something which is already there in the market.
Also, a SWOT analysis at this stage will be quite beneficial. Find ways to counter possible threats and overcome weaknesses. This step automatically pushes you to the next step.
Step 3: Figure out How to Better Market Your Goods/Service
Marketing or promotion is an important part of any business activity. This will also be filling the gaps in your plan to counter threats and weaknesses in your business.
Focus here should be to get most out of every penny you plan to spend. Initially, you may rely on personal word of mouth promotion, and once you have a cash flow from the activity, you may move to the paid marketing stage.
However, remember this is a pre-financing stage, so you are testing the waters, and your focus is to figure out the best for your business.
Once your marketing method is clear it’s time to move to financing your business.
Step 4: Financing Your Business
There are three ways towards your business finance:
- Family, friends, relatives
- Angel Investor / Venture Capital
- Business Loan
Your business activity needs two kinds of finance:
- For Capital Investment
- For Operational Needs (also called liquidity needs)
Even if you choose to apply equity financing, bank credit will be coming into the picture, unless your business is generating enough cash by now. Also, when your business has the capability of generating cash, you would like to keep the management control in your hands rather than the venture capitalists.
Therefore, your financing method for the business will depend on the cash flow from the business.
If it happens that business finance is the best way to fund your activity, you have loads of options. Apart from banks, there are non-banking institutions which offer business loans with a quicker turnaround time.
Financiers like Aditya Birla Finance, specialize in business finance activities and will help you with the needed loan to expand your business.
Step 5: Expand Your Start-Up Venture
Once your business expansion plan is clear, and finance is secure, it’s time to start executing it. You can apply for your business loan online as well. This will save a lot of time and money for you.
And yes, don’t forget, keep an eye on the market conditions to make the most of it.