This podcast covers staying up to date with your Florida business plan in the face of changing dynamics that affect your Florida business. Topics mentioned include changes in income generation, disaster preparedness, succession strategy and business development over time.
Here are some highlights of the podcast:
Ron Johnson: So I guess it’s safe to say that all small businesses want to grow and prosper, but what are some of the dangers of growing without a proper planning?
Casey Wilson: Well, in any business model, Ron, growth means expanding your capacity. You are either adding physical plants, adding personnel, adding technology or production capacity, and adding more people, more staff, and of course, expanding your customer base or your market area, maybe even going international. And since we’re talking about change, maybe even adding or deleting a whole product line or service offering.
That typically means two basic things: one, you need financing to fund the expansion; and two, when you fund that expansion, that means you’ve increased your fixed expenses and your overhead, so that’s going to need to be covered by an increase in business to cover those fixed costs and drop some profit to the bottom line.
And it’s a good point here to mention that, of course, as you know, and many of your programs have mentioned, the Small Business Administration has numerous financing products that are designed for this, like the SBA 504 Loan and the 7(a) Guarantee Program. So, that whole financial piece is extremely important in planning to grow. And then, that’s just the first part, then you have to be thorough in preparing to operate and control the expanded business. Now, the business owner and the founder gets further and further removed from the day to day production, the day to day sales, the day to day customer service.
So the owner has to put systems in place that allow that owner to be sure the business is running efficiently. And more importantly, for a small business person that the business is running up to the standards they first founded their business on.
And now you’ve got the whole array of excellent management skills that would be required, along with the management information systems to allow you to, once again, meaningfully analyze your business and run it. And again, of course, the SBDC counselors are available to provide an objective eye in that whole process.
The big danger is, in growth, that a business owner would commit resources, and the company’s future, to expansion without a solid understanding of what’s going on in the industry, or a solid understanding of what customer behavior has become, or even what the true cost of expanding is.
Anticipating Change: Staying Current with Your Business Plan
Featuring Ron Johnson interviewing Lester Wilson, Retail Industry Manager at the Maryland Small Business Development Center.