As the world continues to recover from the Great Recession, small and medium-sized enterprises (SMEs) remain an important driver of economic growth. The U.S. Census Bureau estimates that in 2016, there were almost 19 million MSMEs with fewer than 500 employees. These businesses account for 99% of all U.S. companies and 92% of all new jobs in the country. Additionally, according to the Small Business Administration (SBA), about 64% of Americans work for a small business, with nearly half those workers employed by firms with fewer than 100 employees. There are many reasons why you might want to grow your MSME business, whether it’s to expand it into a different market segment or to sell it at some point in the future. Here are 7 steps you can take to help grow your MSME business as well as get you ready should you decide to sell someday:
Hire an accountant to get your financial house in order
You should always have a trusted accountant in your corner who can help get your financial house in order. This is especially important if you are operating your business as a sole proprietor. If your business is growing and generating more revenue, you’ll need to take a good look at your cash flow to ensure that you have the cash to pay bills as they become due. Your accountant can help you set up a cash flow forecast so you always know what cash is coming in and what cash is going out so that you can meet your payment obligations on time. A good accountant can also help you determine if you might be eligible for any government grants, especially if you are in the middle of a startup or are expanding.
Invest in technology to streamline your business
You should always be looking for ways to reduce expenses, but you should also make sure that you’re investing in technology that can help you streamline your business. You can use technology to streamline your supply chain, which can help reduce your overall operating costs while building customer satisfaction. You can also use technology to help you improve customer service, which can help you build your brand equity with customers by providing a better customer experience. Another way that technology can be used to help your business grow is by providing an online channel through which you can sell your products and services. An online channel can help you reach new customers in new markets, which can help you grow your business.
Partnered recruiting program to build out your talent bench
As your business grows, you’re going to need to bring on new employees. One way that you can expedite the process of hiring new employees is through a partnered recruiting program. Such programs pair you with employees who have been vetted by the partnering company. Such programs can help you scale your business faster by providing you with a pool of pre-screened employees. They can also help you fill positions that you need to fill quickly because partnered recruiting companies can search for candidates in all 50 states. You should also consider bringing on interns or apprentices to help you with certain tasks or to provide you with additional training that can help them grow their skills.
Don’t be afraid of e-commerce, it can help grow your business
If your business manufactures a product, you may have been hesitant to put it up on an e-commerce site because you were worried about infringing on someone else’s intellectual property rights or patents. An increasing number of companies are providing legal services to help small business owners sell their products on e-commerce sites. You can also build your own e-commerce site to sell your products directly to customers. Building an e-commerce site, whether you hire a developer to build it for you or use a service like Shopify, is not an easy task. But, if it’s something you want to do, you should start planning now to ensure you have enough time to build the site.
Acquire other companies or products to help you grow and diversify
If you’re looking to diversify your business, you should consider acquiring other companies or products to help you grow your business. You can diversify your business by acquiring other companies in your industry or in unrelated industries that can help your business grow. If you’re thinking about acquiring another company, you should be prepared to make an offer that is at the very least 50% above their asking price. Negotiating is something you don’t want to skimp on if you’re trying to acquire another company. For example, if you’re in the food and beverage industry and you’re thinking about acquiring another company that’s in a completely different industry, there’s a chance that the other company’s shareholders may not accept your offer.
Diversification through franchising or licensing
If you’re looking to diversify your business, consider franchising or licensing your products or services. Franchising your business can help you expand your business quickly, especially if you’re looking for growth beyond the borders of your home country. Franchising can be a great option for companies that want to sell their products and services internationally but don’t have the expertise to navigate the laws and regulations of another country. The same can be said for licensing, which is when you give another company the right to use your brand name and sell your products under their name. Licensing can be a good option if you want to focus your efforts on one area of your business while allowing other companies to use your brand name to sell products in other industries.
Grow your MSME business to its fullest potential, and you’ll be prepared to sell it at some point in the future. As you grow your business, you’ll likely make decisions that will help it succeed in the future. When it’s time to sell your business, the best way to sell it quickly is to make it attractive to buyers by following these steps to grow your MSME business.