Business Opportunities in 2018: Prioritizing for Growth
What a difference a year makes! This time last year, we were barely a month into the new administration and the air was filled with uncertainty and hesitation to pursue new business opportunities. Our nation had just endured perhaps the most divisive and tumultuous political year in our history — and no one knew quite what to expect from a new president who had never held political office before and didn’t act anything like what most people thought a president should act like.
One year later, we have a lot more clarity about what the administration means for the nation’s economy and business environment. Whether you support the president and approve of the job he’s doing or not, there’s little doubt that the policies and legislation that have been implemented over the past year have generally been very good for businesses and the economy.
Three Ways to Grow in 2018
With so much uncertainty removed and so many business-friendly policies having been enacted — including the biggest tax cut in over 30 years and major business deregulation efforts — now might be a great time to move forward in pursuing business opportunities that have been stuck on your back burner the past couple of years. Here are three specific ways you might be able to grow your business in 2018:
1. Acquire another business — A merger or acquisition (M&A) can result in turbocharged growth for your business. Instead of spending years working to grow sales and revenue, you can literally double the size of your company overnight by merging with a competitor. The new merged business may be able to realize synergies such as lower costs, greater scale, higher efficiency and shared resources.
2. Enter new markets — You probably sell products or deliver services to a distinct customer market, which may be defined geographically, demographically or by some other criteria. One effective way to grow your business is to expand beyond your existing markets and sell products and services to new customers in new markets. This might mean expanding your geographic footprint or adding new product and service features to attract new and different kinds of customers.
3. Introduce new niche products or services — This is an extension of the idea above. When you roll out new products and services that appeal to niche target markets, you can often command premium pricing, which can grow your business revenue.
You may need to obtain financing in order to pursue these and other business opportunities. If so, keep in mind that we are currently in a rising interest rate environment that will likely continue for the foreseeable future — especially with recent signs that inflation may finally be starting to rise. Therefore, delaying your growth initiatives can end up being costly over the long run.
Five Growth Steps to Take
Here are 5 steps you should take as part of your business growth and expansion plans this year:
1. Perform an opportunity assessment. Your first step should be a careful assessment of all the potential business opportunities that lie before you. Try to look at them as objectively as possible and get input from all the members of your executive team.
2. Clearly identify the best business opportunities. Your assessment should reveal which business opportunities offer the most potential for a high return on your investment.
3. Assess the relative costs and benefits of each opportunity. You can take your ROI analysis a step further by performing a thorough cost-benefit analysis of each business opportunity.
4. Prioritize potential opportunities. Based on your cost-benefit analysis, you can now set priorities for which business opportunities you should invest resources in first.
5. Implement your plan. Start with what you determine to be the business opportunity that offers the highest potential ROI and the least possible disruption to your existing operations. Then devise and implement a plan for maximizing this opportunity.
A project CFO from a CFO services provider can help you identify and prioritize business opportunities in 2018 and beyond. This includes performing an opportunity assessment to help you spot the best opportunities, assess their potential ROI, set priorities, and devise and implement an action plan. An experienced CFO partner will have a proven track record of successfully working with middle-market CEOs and executives in planning growth strategies.
With so much business and economic uncertainty removed and so many business-friendly policies having been enacted, now might be a great time to move forward in pursuing business opportunities and growth initiatives that have been stuck on your back burner the past couple of years. To identify the best opportunities for your company, you should perform an opportunity assessment to identify them and devise an implementation plan. A project CFO can help you plan to take advantage of business opportunities in 2018 and beyond.
Arthur F. Rothberg, Managing Director, CFO Edge, LLC