Tools to help your business grow
Investing in value creation tools can help your business grow
The business journey of many SMEs is often characterised by a gradual change in internal management practices which develop as the firm’s operations grow. The subsequent recognition of the business’s value creation - across all of its operations - tends to emerge slowly but surely alongside this process.
Whilst this may be suitable for some small firms, if you have higher growth ambitions, achieving this at the early stages of your business journey could be hugely beneficial.
There are many reasons for this. As well as improving trust and relationships between customers and those along your supply chain, this information can be used to attract new clients, establish commercial partnerships and access external finance to help your business expand.
Gaining an understanding of ongoing value creation can be challenging. This is because smaller firms tend not to have access to simple and understandable data sets on everything which is and isn’t contributing to value across the business.
For example, intellectual property, human capital and customer and supplier relationships are all common examples of activities where SMEs often experience difficulties in determining the real contribution to the businesses’ overall value, and is not something picked up by financial reports.
Key actions to consider when capturing the value within your business include the following:
- Use cloud and data analytics technology to support growth
- Create a business strategy which incorporates the whole business
- Allow staff to use new technologies to innovate
- Appreciate the importance of technology in attracting external finance.
These actions will help you succeed in developing a successful business strategy.
Use cloud and data analytics technology to support growth
Purchasing relevant software packages could help you access the data you need to understand where and when value is being created. Cloud and data analytics technology can provide a real-time flow of information, offering detailed measures across workflows, whilst also complementing existing reporting processes.
More long term, this technology can provide you with greater flexibility when anticipating future periods of growth. For example, when the time comes to up-scale your business operations, it could help your finance function adapt more easily to any additional demands being placed upon it and mitigate the risk of disruption towards ongoing operations.
At the same time investing in this technology doesn’t have to happen overnight. Software packages can be purchased in stages and tailored to meet the specific needs of your business
Create a business strategy which incorporates everything
Business success will often be determined by how effectively you can combine the value of ongoing operations into the development of a single, overarching business strategy.
In terms of future growth, this integration can support planning processes. By taking a short, medium and long term view on how value creation might change across the business, you will be in a much better place to identify upcoming risks and opportunities towards your growth ambitions.
The practical delivery of this might involve regular integrated reporting across your business’s operations. The more data that is involved in this process, the more helpful it will be towards informing your management decisions.
Allow staff to use new technologies to innovate
You might also want to consider some areas where staff could come up with new ideas to support your business’s growth, and learning from possible failures without the personal risks that entrepreneurship entails.
Allowing staff to use new technologies could help to reduce costs and offer new revenue opportunities as your business expands. It could also help you fully communicate your business’s value to potential clients and commercial partners.
Appreciate the importance of technology in attracting external finance
Investing in technology at an early stage can help attract external investors as well as reducing the cost of raising growth finance. Such investors need to be able to understand the broader strategy of your business.
Lenders are increasingly using data to build up a broad perspective on the growth potential of SMEs. If you are able to provide real-time information - rather than just historical data – of your business’s performance, this could greatly increase the chances of obtaining the finance you need to grow.
Ben Baruch, senior subject manager