Preparing Your Growing Business for the Future

The recent Zurich global SME survey reveals that a vast majority of businesses (91%) favor organic growth over acquisitions, with 31% considering cost and expense reduction their main opportunity for growth.

Small and medium-sized enterprises (SMEs) drive job creation in the global economy, providing 60-70% of jobs in most OECD countries. Despite this enormous contribution, less than half of them survive for more than five years, and only a small proportion will achieve their full potential and become fast-growth firms.

Uncertainty is among the biggest challenges small businesses face. From the global economic outlook and the political landscape to deciding whether to expand by increasing headcount, client base or global reach, businesses must make the right decisions to secure survival and growth. Often, many struggle to predict whether they’ll need twice as much office space in 12 months, or half as much.

Using data gathered from our large client base of sole traders through our annual Great Big Survey (GBS), we explore the key challenges faced by fast-growing businesses and come to conclusions about how they can plan for success without risking stability.

Amid political and economic uncertainty, from Brexit to economic volatility in China, it’s never been more important for small, fast-growing businesses to get their expansion strategy right.

The World Trade Organization anticipates a modest growth in 2017. Many firms may see this as an opportunity to take tentative steps into export, taking products and services into new markets for the first time, which raises challenges from meeting the demands of a new demographic to visibility in a new marketplace.

Others may choose domestic expansion, increasing headcount or seeking out a bigger pool of clients. This requires careful property planning to host meetings and house hires, but the decision making process has to be rapid to meet the pace of change—and that means flexibility is key.

OECD evidence also suggests that access to finance is still holding back fast-growing businesses around the world. This provides the additional challenge of funding whichever strategy best suits your business, particularly in a tough economic environment.

As companies look to test the waters of these various growth strategies without overextending their resources, we’re seeing increased uptake of scalable workspace options, particularly in co-working spaces and flexible office leases, as well as products such as access to meeting rooms and business lounges.

However, far from being a last resort for struggling small businesses, this is in fact a solution, which significantly increases their growth potential. The first part of planning for growth is creating a space in which it can happen. That means having the structural and financial flexibility to make swift decisions and grasp opportunities as soon as they appear. Rather than making big, long-term commitments to secure growth, companies are more inclined to expand from a pre-existing base and to have closer control over staffing costs and overheads as they test new opportunities.

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