Back
Blog | Business Loans

Small Business Loans Are Key to a Big Business Growth Plan

By J Steyn

|

July 2, 2024

Taking out small business loans is a viable strategy for supporting the long-term growth of a business, but only if it forms part of a larger growth plan. Crafting a growth plan is comparable to creating a roadmap for your growing business: outlining the next steps to take, to reach a series of destination goals. 

A well-structured growth plan helps businesses of all sizes to clarify their short-term and long-term objectives, effectively allocate resources (including appropriate business funding), and remain resilient to changing market conditions. Here’s Bridgement’s comprehensive guide to developing a robust growth plan for your business. 

Why small business loans should form part of your growth plan 

It’s admirable to create a growth plan all on your own steam but, given the current economic landscape in South Africa, making accommodations for external help is not just a sage decision; it could make a critical difference, especially if it’s fast and flexible to both support long-term growth without increasing the business’s debt burden. 

If you’re still not sure why planning for business finance is an essential part of your growth plan, read our article on why debt is more cost-effective than giving up equity. This two-minute read could persuade you to consider why equity financing is not actually aligned with an entrepreneurial mindset. 

How to create a growth plan for your business 

The structure of each growth plan depends on a business owner’s individual goals as well as the practical realities of the business itself. However, this broad template provides a helpful starting point to organise action points for each area of the business.  

  1. Begin by assessing the current position of the business 

Where does your business currently stand? To answer this question in detail, it’s helpful to whip out a good old SWOT analysis. Yes, we know you learned how to do this in a classroom, but there’s a reason it’s a classic, isn’t there? 

SWOT stands for strengths, weaknesses, opportunities and threats. Identifying at least one of each is an excellent way to begin writing up a growth plan, as it will help define where the business is currently sitting, where you would like it to be, and how to get there. 

Strengths and weaknesses 

Weaknesses are any aspects that could stunt the growth of a business, either immediately or in the near future. This includes things like resource limitations (such as inconsistent cash flow), outdated technology or equipment, and skills gaps in your team.

Strengths are native advantages that give the business an edge over its competitors. This could be a loyal customer base, a unique product or service, or even a good reputation. 

When considering business strengths, it’s also a good idea to ponder your business’s key differentiator. This is a singular value proposition that sets you leagues apart from competitors. It’s okay if your business doesn’t have one, or you can’t quite see it yet. However, identifying a leading business strength can refine your SWOT analysis and give you a kind of North Star to guide your efforts. Plus, it’s good to remind yourself of what makes your business stand out.

Opportunities and threats 

Threats typically manifest as new and sometimes unpredictable developments from outside the business, though it would be unwise to discount the possibility of internal threats. External threats include new competitors, regulatory changes that cause major industry shifts, and economic downturns. 

On the other hand, opportunities often manifest as gaps and niches that the business could potentially occupy. These could be emerging markets, technological advancements, or industry trends that you can leverage to increase the visibility of your business. 

  1. Set SMART business goals 

Time for another classic — the SMART goal. SMART stands for specific, measurable, achievable, and time-bound. You can refine them further by setting short-term (achievable within 6-12 months) and long-term (achievable within 3-5 years) SMART goals. 

SMART goals should be set in every area of the business, including: 

Marketing 

  • Conduct market research to define and understand your business’s target audience 
  • Conduct a competitor analysis to identify strengths and weaknesses for the SWOT analysis, as well as to position your business more effectively
  • Outline a marketing strategy with both online and offline tactics. Online tactics include social media, email and content marketing, and SEO, while offline tactics include attending industry events, networking, and traditional advertising 

Sales 

  • Draw up an effective sales strategy that outlines how the business will attract and retain customers 
  • Consider implementing CRM software to derive insightful analytics on customer behaviour and market trends  
  • Stay on top of product development: never miss the opportunity to diversify your products and services to meet changing customer requirements 

Culture 

  • There’s a hidden cost in hiring the wrong people, especially in businesses that are prioritising growth; read our article on why hiring the right people is an investment in your business 
  • Ensure that your team reflects a diverse range of skills and experience (and hire for the right level of experience every time) 
  • Invest in training and development for your talent to build business resilience to market fluctuations 

Financial planning 

  • Consider using a cloud-based accounting system if you don’t already; this will simplify and clarify your view of projected income statements, cash flow statements, and balance sheets 
  • Research alternative financing solutions that keep cash flowing during day-to-day operations so that you can focus on your growth strategy 

The flexibility of Bridgement’s business funding doesn’t just accommodate growth; it accelerates it 

During their growth journey, the primary obstacle that most SMEs stumble upon is cash flow interruptions. When faced with the decision to direct capital towards daily operations or fuelling the next growth phase, most business owners feel as though their hands are tied. 

That’s not the case with Bridgement’s financing solutions. Our 24-hour turnaround time empowers business owners to act quickly, and the supreme flexibility of our products means that growing businesses never bite off more than they can chew. Check out our range of financing options here or visit our website to apply.

Recommended

Blog | Short Terms Loans
Financing for Homeowner’s Associations in South Africa July 10, 2024

As entities that oversee the management and maintenance of communal spaces in a building complex or a neighbourhood, Homeowners’ Associations (HOAs) bear significant financial responsibilities for the communities they serve. Between maintaining the grounds, insurance, and common utilities, and managing the overall finances of a building or a neighbourhood, it’s little wonder that the community…

Blog | Financing
Need for Speed: How Fast Can SMEs Get Business Funding? July 08, 2024

For business owners who need to get business funding fast, short-term cash flow finance is your best bet. The good news is that, when your cash flow is temporarily in danger of slowing to a trickle, you can access business funding much faster than you might think.  There are other benefits to having accessible cash…