Business Loans

Small Business Loans Are Key to a Big Business Growth Plan

July 2024 • 6m

Johann Steyn

Chief Revenue Officer

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Taking out small business loans is a viable strategy for supporting the long-term growth of a business, but only if it forms part of a larger growth plan. Crafting a growth plan is comparable to creating a roadmap for your growing business: outlining the next steps to take, to reach a series of destination goals.

A well-structured growth plan helps businesses of all sizes to clarify their short-term and long-term objectives, effectively allocate resources (including appropriate business funding), and remain resilient to changing market conditions. Here’s Bridgement’s comprehensive guide to developing a robust growth plan for your business.

Why small business loans should form part of your growth plan

It’s admirable to create a growth plan all on your own steam but, given the current economic landscape in South Africa, making accommodations for external help is not just a sage decision; it could make a critical difference, especially if it’s fast and flexible to both support long-term growth without increasing the business’s debt burden.

If you’re still not sure why planning for business finance is an essential part of your growth plan, read our article on why debt is more cost-effective than giving up equity. This two-minute read could persuade you to consider why equity financing is not actually aligned with an entrepreneurial mindset.

How to create a growth plan for your business

The structure of each growth plan depends on a business owner’s individual goals as well as the practical realities of the business itself. However, this broad template provides a helpful starting point to organise action points for each area of the business.

Begin by assessing the current position of the business

Where does your business currently stand? To answer this question in detail, it’s helpful to whip out a good old SWOT analysis. Yes, we know you learned how to do this in a classroom, but there’s a reason it’s a classic, isn’t there?

SWOT stands for strengths, weaknesses, opportunities and threats. Identifying at least one of each is an excellent way to begin writing up a growth plan, as it will help define where the business is currently sitting, where you would like it to be, and how to get there.

Strengths and weaknesses

Weaknesses are any aspects that could stunt the growth of a business, either immediately or in the near future. This includes things like resource limitations (such as inconsistent cash flow), outdated technology or equipment, and skills gaps in your team.

Strengths are native advantages that give the business an edge over its competitors. This could be a loyal customer base, a unique product or service, or even a good reputation.

When considering business strengths, it’s also a good idea to ponder your business’s key differentiator. This is a singular value proposition that sets you leagues apart from competitors. It’s okay if your business doesn’t have one, or you can’t quite see it yet. However, identifying a leading business strength can refine your SWOT analysis and give you a kind of North Star to guide your efforts. Plus, it’s good to remind yourself of what makes your business stand out.

Opportunities and threats

Threats typically manifest as new and sometimes unpredictable developments from outside the business, though it would be unwise to discount the possibility of internal threats. External threats include new competitors, regulatory changes that cause major industry shifts, and economic downturns.

On the other hand, opportunities often manifest as gaps and niches that the business could potentially occupy. These could be emerging markets, technological advancements, or industry trends that you can leverage to increase the visibility of your business.

Set SMART business goals

Time for another classic — the SMART goal. SMART stands for specific, measurable, achievable, and time-bound. You can refine them further by setting short-term (achievable within 6-12 months) and long-term (achievable within 3-5 years) SMART goals.

SMART goals should be set in every area of the business, including:

Marketing

Conduct market research to define and understand your business’s target audience
Conduct a competitor analysis to identify strengths and weaknesses for the SWOT analysis, as well as to position your business more effectively
Outline a marketing strategy with both online and offline tactics. Online tactics include social media, email and content marketing, and SEO, while offline tactics include attending industry events, networking, and traditional advertising

Sales

Draw up an effective sales strategy that outlines how the business will attract and retain customers
Consider implementing CRM software to derive insightful analytics on customer behaviour and market trends
Stay on top of product development: never miss the opportunity to diversify your products and services to meet changing customer requirements

Culture

There’s a hidden cost in hiring the wrong people, especially in businesses that are prioritising growth; read our article on why hiring the right people is an investment in your business
Ensure that your team reflects a diverse range of skills and experience (and hire for the right level of experience every time)
Invest in training and development for your talent to build business resilience to market fluctuations

Financial planning

Consider using a cloud-based accounting system if you don’t already; this will simplify and clarify your view of projected income statements, cash flow statements, and balance sheets
Research alternative financing solutions that keep cash flowing during day-to-day operations so that you can focus on your growth strategy

The flexibility of Bridgement’s business funding doesn’t just accommodate growth; it accelerates it

During their growth journey, the primary obstacle that most SMEs stumble upon is cash flow interruptions. When faced with the decision to direct capital towards daily operations or fuelling the next growth phase, most business owners feel as though their hands are tied.

That’s not the case with Bridgement’s financing solutions. Our 24-hour turnaround time empowers business owners to act quickly, and the supreme flexibility of our products means that growing businesses never bite off more than they can chew. Check out our range of financing options here or visit our website to apply.

About the Author

Johann Steyn

Chief Revenue Officer

Johannesburg-based CA(SA) serving as Chief Financial Officer and Chief Revenue Officer at Bridgement. Before his current dual role, Johann was CRO and Exco member at VAT IT Group, where he was responsible for worldwide distribution. Prior to that, he was a Senior Manager at PWC, where he led various accounts and projects listed on international stock exchanges. In 2022, Johann’s financial expertise and professional excellence earned him the honour of being selected qualifying as a SAICA Top 35 Under 35 finalist. He also currently serves on SAICA’s ITC, a sub-committee of the Board which oversees the Board 1 exam-setting process. Johann considers this work an important investment in the future of young CAs(SA). Johann’s strategic foresight (as well as his affinity for all things tech) led him to learn various coding languages and data analysis techniques in 2019, which in turn led him into the fintech worldto his current position at Bridgement. As the CRO, he’s responsible for overseeing revenue generation and growth, but also manages the entire P&L overview within Bridgement. Having made it his mission to eliminate unnecessary complexity wherever spotted, Johann is committed to making Bridgment’s processes as simple and efficient as possible for SMEs. In his own words, Johann only spends “20% of my time on finance (because I fully automated the finance function), and the rest of my time is spent on building the business.” That time is divided between client meetings (50%) and his own projects which involve innovating and building smarter technology solutions that solve problems and make the lives of clients easier (50%). The other 20% consists of planning and strategising - and yes, he’s well aware that adds up to more than 100%. For Johann, it’s vital to remain relevant by keeping up with trends and developments in the SME landscape. Equally important is building authentic relationships based on honesty and trust, between family, friends, colleagues and clients. Bridgement nurtures the growth of South African SMEs by removing the barriers to accessible funding. Johann’s role at Bridgement applies fintech to making it simpler and easier for businesses to obtain the funding that they need as they need it. Through their work, they have supported more than 10 000 jobs in South Africa.