Investment Options for Business Growth

Information verified correct on December 10th, 2016

Business growth and investment: strategies that work

If you have attained a certain level of success in your business and have determined that it is the right time to grow your business, there are several strategies that you can use for doing so. The obvious steps to grow a business would include opening up newer markets as well as developing new products and services to sell to your existing customer base. However, there are other avenues too that can be explored to grow your business successfully, such as the ones outlined in this article.

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Successful avenues for business growth

Business growth can be achieved by adopting any of the following strategies:

  • Merging your business with another company: Most people think of a business merger as something to resort to when your business is failing and you need help to survive. However, that is not necessarily true. While business mergers can help a company that is facing some tough times, it can also be used as a growth strategy. By merging your business with another company, you can benefit from reduced cost of operations as all the duplicate systems and functions can be done away with, thereby reducing your fixed costs to a great extent. You will also gain access to a much wider customer base and perhaps be able to sell your products to a larger market.However, mergers do have a tendency to turn into acquisitions and that is something you need to avoid at any cost. An acquisition is when one company takes over the operations of another company completely and leaves no control in the hands of the acquired company. A true merger is when you can combine operations of two different companies to drive business growth for both the entities, now combined into one. Hence, if you are planning to merge your business with another, you need to choose a company that is similar in strength to yours and also has similar working cultures. Their long term goals need to be in tune with your long term objectives and the owners of both the companies should have a say in the expansion plans of the combined entity.
  • Taking on a new partner in your business: Another great way to grow your business is to take on a new partner or partners in your current business. The new partner brings in some needed expertise into your business and will also typically infuse new capital into the company. In return for this, you need to give a certain amount of stake in your business to your new partner. However, parting with ownership in your business, however small, is never easy and you should thus take such a decision after careful consideration of the pros and cons of taking on a partner.One of the most important questions you need to ask in this regard is – what does the new partner bring to the table? If money is the only thing that your new partner is bringing to the table, you need to ensure that the capital is enough for your business growth needs. However, it is best to take on a partner if they are bringing in some specific skill sets and talents to your business rather than just money. After all, money can be raised through different financing options and you do not need to sell a part of your business in order to do so. However, a partner who has the necessary expertise that you are looking for and who has a similar vision for the business as yours, can be a valuable addition to your business and can help to ensure that your business growth plans are carried out successfully.
  • Buying another business that is doing well: Buying a small business is also a successful way to grow your own business. However, you should look for a business that is doing well rather than trying to buy a business that is struggling. If you buy a struggling business, it is true that you may be able to acquire it at a lower cost. However, you do not want to focus all your business resources in trying to turn such a business around, when what you need to be doing is focusing on growth. Hence, buying a small business that is doing well is the way to go. The business you choose for this purpose should have a well established customer base, good products or services that are complementary to your products, as well as competent employees who can help you in your growth plans. Most importantly, the business that you are looking to buy should be such that it can be incorporated into your current business operations seamlessly and without too much hassle.

Before you decide to go in for any one of these avenues for business growth and investment, you need to maximise the current potential of your business and ensure that the timing is conducive for business growth.

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