Detour ahead: What you should know before you go
Expanding your business can be one of the most exciting roads you ever take. It can also be one of the most dangerous. To reach your destination, you need to know which roadblocks to watch for – and how to drive around them. 

Inside your engine
Growth can be sparked by either a “pull” or a “push” mechanism. A “pull” strategy occurs when your market demands more from your business or industry, such as an increased demand for products, a growing customer base, or a decrease in competitors. The “push” takes place when your company tries to drive growth on its own. Common push strategies include mergers, acquisitions, and product/service line expansions.

Avoiding roadblocks
Regardless of which growth strategy you choose, you’ll run the risk of hitting a variety of obstacles along the way. Be sure to watch for: 

• New/emerging entrants in your market, resulting in increased competition.
• Diminishing natural resources or supply sources.
• Overpayment for a new acquisition.
• Poor integration with existing systems and employees.
• Lack of available capital. 
• Poor strategic planning or execution.
• Overwhelming demands on staff, equipment, and/or suppliers.
• Wasted resources - both human and financial - that could be redirected toward more profitable ventures.
  

Mapping your detour
As a growing company, you can’t eliminate every roadblock that lies ahead. But you can implement concrete strategies to help you manage your growth more effectively – and reduce the potential risks to your company.

1. Build a strategic plan. For example, if you want to expand your business through acquisitions, your strategic plan should include key criteria such as the type of company you will consider purchasing; the company’s approximate size; where it will be located; the price range you are willing to pay; and any key characteristics the company should have in common with your own.
    
2. Develop an integration plan. Before you make an acquisition formally, you should have a plan that describes how the business will integrate with your own. Will it become a new division in your existing company? Will it be treated as a separate entity?
   
   
3. Secure management and staff buy-in. Gaining the support of senior executives and your overall team is critical to healthy growth. This is especially vital if your growth stems from a merger or acquisition; different companies may have vastly different ways of doing business.
   
   
4. Find the right capital. Growth nearly always requires an infusion of capital at some stage of the process. Make sure you know how much capital you will need to embark on your growth plan, as well as the type of capital that will best meet your needs. This could save you valuable time and money down the road.

Growth can be a risky business, regardless of how strong your company may be. Careful planning can help ensure you have the capability - and the resources - to overcome potential roadblocks and manage your growth more effectively.

By Ron Hymers, Senior VP, Managing Director. For more information, please contact your local MNP advisor or Ron at 1.877.688.8408.

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