You have been running a business for a while. You are thinking about taking the next step. Sell new products, hire staff, start exporting your goods. What is the right choice for you? What can you expect? How should you go about realising your growth? Writing a growth plan is an essential step. It helps you focus, and identify the risks, challenges and opportunities you will have to face.
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First of all: make sure you make time to growIf you want your business to grow, you have to make time for writing your growth plan. Appoint someone to take over (part of) the day to day business of your company, so that you can devote part of your time to your growth plan. Otherwise, both your business and your growth plan will suffer.
Pick a strategyYou can expand your business in several ways. Usually, if you choose one, others will follow logically:
- You can extend and/or diversify your product or service range. Sell two types of bicycle instead of one. Or start selling bike accessories, or extended warranty and repair services.
- You can hire staff. Usually, this also means relocating to a larger space.
- You can start trading internationally, exporting your goods.
- You can open a branch office or subsidiary, either in the Netherlands or abroad.
Laying the groundwork
Find out if you need permits or licences to go ahead with your plans. For instance, if you want to build a workshop next to your office, does it comply with the municipal zoning plan? Do you need an All-in-one permit for physical aspects (Omgevingsvergunning)? And which taxes will you need to pay, for instance for waste disposal and for putting up a neon sign (municipal tax on enchroachments on or above public land)? Get in touch with your municipality to find out which rules, taxes, licences and permits apply.
If you plan to hire staff, you will have to start paying payroll tax, and you will need to set up a payroll record. Hiring employees comes with its own set of rules. Read what to do in our article Hiring your first employee.
Sole proprietor or bv?
All these changes come with added liability. If you started out as a sole proprietor, the extra liability affects you personally: if your business doesn't make it, you will be personally responsible for all the costs that have to be paid. It may be a good idea to think about changing your legal structure to one that carries legal personality - for instance, a private limited company or bv. Another advantage of setting up a bv can be lower taxes: if your profit exceeds the €150,000 mark, you will have to pay fewer taxes as a bv than as a sole proprietor. Read more about the bv.
If you want to start selling different products, find out if there is a market for them in your current market as well as any others you might be exploring. Will people want to buy your product or service? Market research can help you find the answer to that.
There are several types of market research: you can conduct an online survey to find out what your existing customers think; you can conduct interviews with random respondents to get a better picture of the overall demand for your idea; or you can search the literature in your sector to find out which way the market is moving, and what the trends are. Depending on how thorough you want to be, and how much budget you have, you can also decide to hire an agency, or an intern.
If you want to start trading internationally, for instance selling handbags, find out if the country or countries you want to do business with will want to buy them. Can you find an agent or importer in your country of choice?
If your market research shows that there is a potential market for the product or service you want to develop, you can go ahead. This will also make it easier for you to find investors.
FinanceJust as you had to pitch your business plan when you were just starting out, you will have to pitch your growth plan, if you want to find additional funding from banks or investors. Or perhaps you can benefit from government funding, for instance from a ROM (Regional Development Company), if your products and services are innovative. And perhaps you can benefit from subsidies or tax schemes. To actually get the money you want, draw up a financial chapter in your growth plan, stating clearly how much money you need to do what in a (say) 1- or 5-year period. Show that you have put some thought into it.
Also see: webinar Financing your business in the Netherlands