Exercise caution when considering a second location for your business. Numerous proprietors establish a thriving enterprise in one site and aspire to expand to another. However, they may not recognise that the success of the initial location depends on their presence and supervision. Before contemplating expansion, take an extended holiday, lasting between eight and twelve weeks, to evaluate the business's performance in your absence. Only when the enterprise is thoroughly systematised, operates efficiently under management, and succeeds during extended periods of leave should one embark on multi-site operations. It is impossible to be in two places simultaneously!

Another significant challenge in the rapid growth of a business is cash flow management. If your customers remit payment in advance, prior to receiving products or services, and your business has minimal or no inventory requirements, you will be poised to grow at a faster pace than those enterprises that collect payments 30, 60, or 90+ days post-delivery or maintain sizable inventories. This advantage stems from the fact that your capital is not tied up in inventory or extended as "loans" to customers (debtors). Consequently, the nature of the business determines its maximum desirable growth rate. Regrettably, numerous enterprises encounter difficulties in achieving growth rates exceeding 30% per annum without the continuous infusion of additional equity or recourse to debtor factoring (invoice financing).

Should you possess a high-margin product suitable for direct-to-consumer sales, consider expanding via a party plan or network marketing. The Direct Selling Association of Australia features a variety of highly profitable businesses engaged in this distribution channel. Perhaps your enterprise is prepared to venture online and market to a global audience. Do you offer a unique or niche product range that could appeal to an international market? Numerous small local businesses have cultivated extensive global markets by establishing an online presence and mastering website promotion. Wicked Weasel (www.wickedweasel.com.au) is an Australian small business success story in the online realm.

You might contemplate forming a strategic alliance with one or more key customers or suppliers, genuinely collaborating with them to enhance their business growth, thus augmenting your own. Alternatively, you could explore co-opetition—cooperating with some of your competitors to pursue a more substantial new market. "Cottages of the Colony" in Tasmania serves as an exemplary marketing and branding cooperative of individual bed-and-breakfast properties appealing to the global market. Other businesses may join forces to secure larger contracts, and government grants could be available in some instances.

In the book, The Roaring 2000s, Harry Dent elucidates the nature of the product and business lifecycle. First, there is the slow initial growth phase, followed by rapid growth and robust demand as the product gains acceptance. Subsequently, growth slows down as the market matures and demand becomes saturated. Finally, a decline occurs as the product is replaced by another or the public and business owners lose interest.

The book also provides a fascinating analysis of the spending habits of individuals of different ages. Young and older adults tend to spend very little, whereas middle-aged individuals reach their peak spending years, covering expenses for children, homes, cars, and luxuries. By combining this with the population distribution by age group, one can forecast consumer spending into the future. The demographics, or age distribution, vary for each country depending on factors such as baby booms and the effects of war. For instance, Japan is missing an entire generation due to the casualties of World War II. In his book, The Profit Zone, Adrian Slywotsky identifies 22 different models of highly profitable businesses. Many of these models relate to the ideal timing of the marketplace, being present at the right time and place during the profitable "high demand" growth phase mentioned earlier. This period is the most valuable in business, characterized by high demand, too few suppliers, and a disregard for price.

However, as more suppliers enter the market, margins decrease, leading to market maturity (e.g., DVD players). Prior to this, the costs of developing the market and the slow penetration rates make the business less profitable (e.g., HDTV and 3G phones). Timing the market can also have drawbacks, as Palm Corporation, the manufacturer of handheld Palm Pilots, discovered when it introduced colour screen units to the marketplace. The company was left with hundreds of thousands of unwanted black & white screen units and a massive demand for coloured units that it could not fulfill. Another significant issue with timing the market is distinguishing trends from fads. Products like Rubik's Cubes and Razor scooters can have a dramatic short-term impact on sales but may possess a very short product life. The Tipping Point and Next are excellent books for identifying future trends.

Your business serves as an investment vehicle. The profit generated at the end of each year represents your Return on Equity (ROE) on the capital you have invested in the business (its value if sold). For instance, Wesfarmers, a large Australian business conglomerate and owner of Bunnings, mandates a minimum return of 30% ROE for all its enterprises. Consider how much ROE your business yielded last year. Might the funds be more effectively invested elsewhere? If your profits increase by £100,000 this year, you have added anywhere between £200,000 and £500,000 to the value of your equity in the business (based on a valuation of 2-5 times EBITDA).

Naturally, to access this equity, you would need to sell your business, but this example underscores the value of enhancing profitability. The primary lesson is not to become overly engrossed in your passion for the business. Refrain from overspending on assets that will not return better than 30% per annum in profit to the business. Under-utilised machinery and unnecessary (though enjoyable) expenditures fall into this category. Recall the distinction between Harvey Norman with its modest offices and Coles Myer, boasting luxurious wood-paneled offices. While this discrepancy may not significantly impact customers, it certainly matters to the shareholder (you).