5 Ways to grow a business

Growing the business is a milestone for every business owner. While the task may seem daunting, meticulous planning can help make the process easier.

A lot of internal as well as external factors need to be taken into account before deciding on the nature of the expansion, be it lateral or vertical. Some of the factors that need to be considered are market conditions, latest trends, demand and supply amongst others.

1. Adding new products and services: Launching new products and services by diversifying the existing lines or competing in a new segment can help business owners to grow their business, increase portfolio and sales. The decision to introduce new product mixes to the portfolio needs to be done through an exhaustive financial analysis. It is also important to understand and evaluate potential demand for the product/service about to be launched through analysis of current trends and market research.

2. Expanding into newer markets/customer segments: Expanding into a new market is an effective way of leveraging the core business for growth. Entry into new locations will require a significant investment of both time and money, so one needs to perform a thorough market research first to ensure there is enough customer demand in the new territory.

3. Introducing new sales/distribution channels: Many businesses find that one of the best ways to expand is by introducing a new sales channel. Apart from retailers, distributors and direct sales, an ecommerce platform can also help increase reach. As per a Google-KPMG report, digital MSMEs grow profits up to twice as fast as offline counterparts. In fact, the study pointed out that nearly 51% of digitally-enabled businesses cater to customers beyond city boundaries when compared to 29% of offline businesses.

4. Acquiring another business: Acquiring another business can be an effective way to enter a new market, increase market share or diversify. While it can help a business scale-up significantly, it has to go through a clear process of due-diligence. The business owner must take into account the target company’s financial health, the quality and the capabilities of the management, the width of the firm’s customer-base and the viability of existing contracts.

5. Franchising your business: Franchising a business can be a good growth strategy especially if the business model is profitable and can be replicated easily. The business owner has to go through a stringent process of checks and balances before choosing a franchisee partner. For instance, the business owner must see whether the franchisee fits the business’ operational structure. Also the business owner needs to draft a clear legal agreement, select locations carefully, and be willing to support the franchise financially and with knowledge input during the first few months.

How can businesses get capital for their expansion?
Once the strategy for expansion has been decided, the next big step is to get capital. Decisions such as where to get the funds from, which bank or NBFC approach, what type of loan to apply for and what documents to use, need to be taken.

To apply for a loan, business owners need to prepare the loan application which includes KYC documents, entity proof, latest ITR, copy of PAN card of the business, address proof of the business, last three years of audited financials, current year’s performance and projection and most importantly proof of the business’ creditworthiness.

Here, CIBIL Rank and Company Credit Report (CCR) can help.

CIBIL Rank and CCR is an indication of the business’ loan eligibility. The CCR is a record of a business’ credit history, based on the data submitted to CIBIL by the lending institutions. CIBIL Rank is a summary of the CCR in one number, which is measured on a scale of 10 to 1, where 1 is the best rank. The CIBIL Rank and CCR helps banks and NBFCs assess the business and make an unbiased and objective decision. They may even approve the loans faster and extend lower interest rates depending on the CIBIL Rank and CCR.

Thus, the CIBIL Rank and CCR can help the lenders evaluate the business and ensure a smooth loan application process. Business owners can apply for a loan with confidence with a high CIBIL Rank and CCR and successfully implement their business expansion plans.

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