As the UK begins to emerge from recession, many small business owners are looking for opportunities to expand. The business landscape has changed, and many firms now find themselves in a strong position.
Expansion is a goal for many business owners. But figuring out how to expand safely and efficiently is a difficult task. Unless you have the chance to buy a competitor or quickly expand into a new market, it can be tricky to work out how to expand. So here are some tips for growing your business – in any economic climate.
Many firms waste resources through a lack of efficient targeting. If you think you are getting a poor return on your marketing investment, you should consider ways that you can target your efforts better.
To begin with, you will need to define your target market. Who is it that you are trying to sell to? Without defining your target market you cannot hope to properly direct your marketing resources. Is your product or service going to be of particular interest to men between the ages of 25 and 30? Or car enthusiasts? Or women with children? Whatever your target demographic, you should think of marketing campaigns that will appeal directly to them.
Online marketing provides improved opportunities for targeting. Using online advertising methods you can easily target your resources towards potential customers in certain geographical areas, or with certain interests. You may therefore wish to consider diverting more of your resources to online activities.
Firms of all sizes lose out on sales simply because they are not properly organised. Do you have comprehensive policies and workflows in place to help you keep track of leads and to ensure that nothing slips through the cracks? If not, this should be a priority.
Technological solutions like Consumer Relationship Management (CRM) software can help you keep on track of the sales process throughout a customer’s life-cycle. You can also keep hold of the details of leads that are not converted, and set yourself reminders to contact them again at a certain time. This can be a vital help in ensuring that you make the most of every lead. Ultimately, this will help to expand your market share.
Don’t forget to organise your (home) office too. Read ‘how to organise your home office’.
Develop a USP
If you are operating in a congested market, it is vital that you develop a unique selling point (USP) – something to set you apart from your competitors. This could be as simple as superior customer service or longer opening hours. Whatever it is, you must ensure that potential customers are made aware of it.
You should think carefully before attempting to compete on price, particularly if there are larger firms providing the same products or services. Economies of scale mean that larger firms will almost always be able to produce things more cheaply.
Diversification isn’t everything
Many small business owners assume that growth means expanding into new markets, or offering new products or services. This is not necessarily the case. While diversification may well be a good option for your business, it is not the only means of expansion. Rather, you can grow your business by expanding your market share in areas in which you already operate. This might be through improving the quality of your offering, or by absorbing smaller competitors.
If you do choose to expand into new markets, make sure that you do so in a methodical, well thought out fashion. Many firms grow too quickly, without conducting the necessary market research.
Get the help you need
There is a range of support packages available for firms that wish to invest for growth purposes. The government’s loan guarantee and capital enterprise schemes can help to provide you with the financial help that you need to expand your firm. The Business Link service can also offer invaluable, personalised help to complement that offered by your accountant and other professionals.
Many small business owners seem to feel shame about seeking help of this sort. But, where help is available, you should always consider taking it.
If you need financial assistance and you have clients who pay for your products or services by invoice, you could try invoice finance. Many companies use this to fund growth over other types of borrowing.
Finally, a note of caution. A significant number of firms collapse because they expand too quickly. Be sure not to overstretch yourself and, if you do choose to expand your offering or to enter new markets, make sure that you conduct exhaustive research first. You must also ensure that you can finance your expansion and manage your cashflow at the same time. Products like factoring and invoice discounting can help you achieve this.
The current business environment is an exciting one. With proper planning and some creative thinking, you can make the most of the opportunities for expansion.