Ensuring growth and innovation as a small business isn’t just about luck. You’ll need careful planning and some thinking outside the box, particularly if you have a tight budget.

How to Drive Business Growth on a Tight Budget

April 14, 2023

Ensuring growth and innovation as a small business isn’t just about luck. You’ll need careful planning and some thinking outside the box, particularly if you have a tight budget.

Research from the global management consultancy firm, McKinsey, shows there are six key rules for value-creating growth:

  1. Design and research an innovation for a product or service that can scale
  2. Identify and prioritise profitable and fast-growing markets
  3. Aim to be better than your competitors
  4. Focus growth on your core industry
  5. Ensure you also foster growth in nearby business areas
  6. Prune parts of your business that could restrict your growth.

McKinsey’s website has more detail on these points.

Defining your budget

The first step is to create a budget and then stick to it. List your costs, so you know how much income you need to cover your expenses. Split your list into fixed costs, including rent, mortgage payments, software subscriptions, etc., and variable costs, such as supplies, labour, and conference attendance.

Consider using accounting software or a cashbook to track your income and expenses. This is a useful tool to see if the business is overspending and not maintaining a sufficient buffer for when cash flow is tight.

Based on that information, draft up your budget, follow it, but review and tweak as needed. Try a free budget template from Business Australia, or see HubSpot’s recommendations.

Let technology do more

Small businesses can streamline their processes and systems more efficiently with technology. Consider investing in:

Connect the right people

When your resources and budgets are tight, think about harnessing the power of networking and connecting with the right people.

To find the right people for your innovation project, identify and seek out decision-makers who could be crucial to its success. They may be internal (management) or external (stakeholders, investors, clients) to your business.

You may find the right people by joining an incubation or innovation hub, such as at:

Use inexpensive (or free) marketing

Small businesses can benefit from inexpensive but powerful marketing tools such as:

  • Email marketing Mailchimp (free for up to 500 contacts)
  • Google My Business
  • Low-cost advertising on social media channels, such as Instagram and Facebook (learn via Google Digital Garage)
  • Regularly blogging on your business website and YouTube and cross-promoting via your other channels.

Financing your business growth

Small businesses that follow these key strategies and tips can ensure growth and innovation, but you may still need access to other funds to realise your innovative service or product. That’s where we can help. Reach out to us to discuss best-fit options for financing your business growth.

This information is for general information purposes only. The information contained herein does not constitute financial or professional advice or a recommendation. It has not been prepared with reference to your financial circumstances or business and should not be relied on as such. You should seek your own independent financial, legal and taxation advice as to whether or not this information is appropriate for you.

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