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April 10, 2015

Feast after famine – driving post-recession business growth

Growing PlantSales are on the up and new business enquiries are increasing. The green shoots of recovery are taking root and optimism is in the air. But beware – how ready are you for the upturn? Will your business be able to reap the benefits?

For some time, the advice has been to ‘batten down the hatches’, cut costs and reduce stock and staffing levels. But now things are on the up, a fundamental shift is required. SMEs should no longer be treading water but gearing up for growth.

One of the major pitfalls of going from business famine to feast is that owners and managers stay in a risk-averse mindset. They stay rooted to the spot in a kind of business paralysis unable to take the necessary steps to seize emerging opportunities and drive growth forwards. It leaves them stagnating and gives competitors the chance to steal market share.

Some businesses swing in the other direction – hiring new staff left right and centre and buying up stock like it’s going out of fashion to try and keep up with demand. Before they know it, they find themselves with major cash flow problems as they deal with the inevitable time lag between upfront investment and getting paid.

Instead, balance is required to survive and thrive in this post-recession environment. It’s important not to be blinded by the lure of making short-term profits at the expense of putting longer-term planning and investment in place.

This means taking the time to really look at your market with a fresh (and wiser) pair of eyes. Is there an opportunity to innovate your product offering to drive value and achieve sustainable growth? Do you have the right staff in place to grow sales and boost revenues? Are you keeping an eye on the bottom line? And more importantly, do you have the resources and the cash flow to meet increased demand and the working capital to achieve further growth?

The chances are you learned valuable lessons during the recession. Keeping a close eye on credit control, invoicing on time, shopping around for the best suppliers, negotiating discounts, watching stocks levels, etc. all these things are important. But now is the time to look at the bigger picture and develop a strategy for growth. Fail to do so and you risk being left behind.

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