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Growing Your Business: Building and improving capacity

Business & Commercial

Ambitious woman standing in an office.
Don’t be afraid to expand your operations if there’s enough demand to justify it.

Growing Your Business: Building and improving capacity

To meet the demands of increased growth, it’s likely that you’ll need to increase your capacity by either doing more with what you have, or adding in new skills, expertise and equipment.


First, build in-house capacity

Enhancing your resources in-house is the first step to take, just in case it’s enough to build your capacity without needing to dramatically change your business.

If you need additional skills in your business instead of a new hire, consider re-training existing employees. Start by auditing your needs and then identify which vital skills are missing. This will form the basis of new job descriptions.


Optimize your systems

Good record-keeping and bookkeeping will help you know how your business is doing. It’s easy to track all your expenses and revenue if you use accounting software.

Automate everything that a customer expects to be automated. This could include;

PayPal to receive offshore funds, Shopify to run an online store, Vend to manage retail POS, Google Analytics to track web traffic, Mailchimp to send e-newsletters and of course Facebook, LinkedIn, and Twitter to run your social media campaigns. Find out which apps apply to your industry the most by talking to your industry association or other business owners.

Cashflow forecasting will enable you to anticipate a possible cashflow problem. Some solutions include:

  • Tight creditor and debtor control (invoicing promptly and collecting debts on time)
  • Realistic pricing and costing to ensure every sale is profitable.

Small business owners often complete a variety of similar daily tasks. Document each important or daily process in your business and then identify develop templates or standard forms for everyday work to speed everyone up.


Tips for building external capacity

Once you’ve streamlined your business, the next step is to take the plunge and increase your overall capacity (checking that any increase in demand is sustainable).

Consider contractors

Identify third party contractors or other companies that could take up extra slack to increase your capacity at any time. It will free you or employees up to work on the more important parts of the business (such as marketing or delivery/production). Having a number of other people or businesses that you can contract parts of what you do can ease temporary capacity issues, before you decide to employ full timers, or buy additional equipment or inventory space.

Review your equipment

If some of your equipment is outdated or obsolete, would an upgrade help improve your overall capacity? You could;

  • Lease key equipment or machinery until the capacity issue is solved
  • Investigate new technology that removes redundant processes or replaces manual tasks
  • Buy new equipment.

Purchasing new equipment can be expensive but remember that competitive advantage is gained from getting products to market quicker than your competition. Conduct a cash-flow forecast to see the impact loan repayments have compared to the extra efficiencies or production you’ll gain.

Strategic alliances

Forming a business relationship with a partner, or partners, may provide you with a number of advantages. You may be able to access technologies or patented processes owned by the other partner. Additionally, you may be able to access their distribution network.

If you are thinking of forming a partnership, consider your strengths and weaknesses compared with your potential partners. The ideal partnership takes advantage of your core competencies, while strengthening weaker areas of your business.

Well-chosen partnerships can provide advantages including:

  • Working in partnership allows you to share the work and commitment
  • Complementary skills
  • Opportunities for growth
  • Access to resources such as specialized staff, finance and technology
  • Access to your target market
  • They can provide support and motivation.

Raising capital

If you decide there is merit in expanding your capacity or improving your capability, it could be worthwhile to invest in making it happened. Some options include:

  • Accessing funds from Friends and family
  • Borrowing from the bank
  • Angels investors (often other business owners) who think your business is promising and are willing to buy into your business
  • Venture capitalists
  • Government and state assistance
  • Corporate investors



Don’t be afraid to expand your operations if there’s enough demand to justify it. You’ve heard the old saying – you have to spend money to make money – and this is especially true of spending to improve your business capacity if you’re getting the kind of on-going orders that require a larger operation.