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Update: The Australian and New Zealand operations of Bibby Financial Services were acquired by Scottish Pacific Business Finance in late 2015 to create Australia’s largest non-bank invoice finance specialist. Welcome to our website.

scottish pacific growthHow do you know when it is time to focus on meaningful growth?

It’s hard to imagine there are any businesses out there that don’t want to grow. The potential for growth and expansion (and an associated rise in profitability) are among the reasons people decide to open their SME in the first place. However growth is highly challenging and carries some significant risk. It takes time, energy, resources, tenacity and focus, all of which can be in short supply at various times. Whether the business is ticking along nicely or has been ‘battening down the hatches’, it can be difficult to spot the signs it is ready to grow more substantially.

Below are some simple indicators for when your business is ready to start that next stage of growth:

1. Growth-ready businesses enjoy strong demand
Your products are selling well, and possibly beyond what you had ever forecasted. Indeed, the demand has become so high that you are turning away orders and potentially helping your competitors.

2. Growth-ready businesses have profitable product lines
Selling products is one thing; getting solid margins may be another. But each and every product you sell makes a profit, and when you introduce a new
product line it always sells well. This is a sign you have managed your product portfolio well and market acceptance of your products is high, and perhaps now is a time to start focusing on finding new segments or geographic markets, increasing distribution and even considering export.

3. Growth-ready businesses weather uncertainty
Economic uncertainty is a key factor in business investment decisions, but if the business is finding it can weather this uncertainty well and absorb any ‘shocks’ it is a sign of the business’ strength and of a good business model. This should provide confidence that the business can take on the challenge of growth.

4. Growth-ready businesses get great feedback
When you check in with your customers on how the business is performing, including through Net Promoter Score (NPS) measures testing loyalty, they have great things to say. Unsolicited online feedback is solid, too. Plus, your staff engagement figures are really high, you retain key staff and find that people genuinely want to work for you. Indeed, you actually find it relatively straightforward to find good staff.

5. Growth-ready businesses have a diverse customer base
Your business attracts young and older customers from all over the country, or the world. Or perhaps your customer base is strong, but concentrated, meaning you are ready to appeal to other customer groups.

6. Growth ready businesses have strong cash flow and high working capital levels
Your business has strong and reliable cash flow and DSO (days outstanding) is low relative to your competitors and the market.

7. Growth-ready businesses enjoy good relationships
No matter whether you are dealing with your internal team of directors, staff,
suppliers or financiers, the communication channels are open and the
relationships are honest and tight. Staff engagement is high and the business’ vision and mission are understood and bought into. Financiers are always willing to provide
you finance and, in fact, seek you out to offer it. Growth-ready businesses are well supported with high quality advice.

8. Growth-ready businesses rarely need to seek potential buyers or business partners
You are regularly being approached to see whether you would consider selling
your business.

It is no mean feat to have a business that is off the ground and humming along. But it also raises the question: where to from here? The obvious answer is to grow.

This brings us to the topic of financing. There are a variety of financing options of course, ranging from overdrafts, family and friends, personal savings, business loans, crowd funding and others, but one option which makes sense for growth-ready businesses in particular is debtor finance.

Suited to businesses selling on credit terms to other businesses, it is becoming very popular because it is a flexible and dynamic form of finance; Instead of being secured against real estate, it is linked to the value of a business’ outstanding debtors, meaning that as your business turnover grows, it does too. Ideal for growing businesses.

Receivables are often among the largest asset-classes on the balance sheet, particularly for smaller businesses. This means that often a significantly higher level of funding can be accessed compared with other forms of funding. Also, ideal for growing businesses.

This tool works as a line of credit against your receivables, so your unpaid invoices can be turned into cash. That means you get money immediately to fund your growth needs – more stock or staff, for example – without using your family home as collateral.

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