Podcast: challenges associated with growing an existing business
By Josh Hall
In this podcast, Josh Hall talkes about the challenges associated with
growing a business. Listen to the podcast or read the podcast on this
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## Read the podcast
As your business begins to grow, cashflow will become an ever bigger
problem. Even very short-lived or sporadic cashflow issues can rapidly
become major problems. Indeed, many businesses are at their most
vulnerable as they begin to expand. Liquidity issues can creep up,
particularly when spending in a firm increases quickly, and this can
have a disastrous effect.
It is vital that you keep a close eye on your cashflow at all times.
Monitor your income and outgoings, and refer back to your cashflow
forecasts regularly. This will help you to identify potential problems
well in advance, and take steps to avoid them.
If you think that you will need some extra funding to get your expansion
plans off the ground, you should make sure that you have these in place
before making any speculative expenditure. A worrying number of
businesses begin their expansion plans before they have the necessary
cash in place, and this can be fatal.
Of course, if you are confident that you are in a financial position to
do so, you will probably be looking at ways to grow your business –
either now, or at some point in the future. There are three main ways in
which you can do this.
The first is to expand into new markets. Many firms grow by developing
and launching new products, perhaps in an area distinct from their core
business. There are both risks and benefits associated with this course
of action. While penetrating new markets can help you to expand your
customer base and develop new revenue streams, it is rife with problems.
Many businesses launch new products without developing the expertise
they need to see them through. Similarly, it is common for established
businesses to forget the importance of market research, and presume that
the strength of their brand will see them through. More often than not,
this is not the case.
The second possible method of expansion is to increase your market
share. There are several ways that you can achieve this. To begin with,
you might find new ways to compete with other businesses in your sector
– for example by undercutting them. In this way you can divert customers
from your competitors.
Alternatively, you could expand your market share by acquiring
competitors. This can be a very simple way to increase market share, but
it relies on you having sufficient finance available.
Finally, you might choose to expand through strategic partnerships. A
strategic partnership is an agreement with another business under which
each party provides something of use to the other. So, rather than
simply buying things from each other, you consider ways that you can
work more closely together. This can often yield opportunities far
greater than the benefits you get from sharing assets or buying
As a growing business you should also be concentrating on branding. Your
brand is a vital aspect of your organisation. Indeed, in many businesses
it is the single most important asset.
It can take businesses many years to develop a comprehensive, effective
branding strategy. But it is something that you should keep at the
forefront of your mind. From the logo and typeface you choose, right
through to the tone of voice you use on marketing communications,
everything that consumers see or interact with should be properly
thought through and in keeping with the rest of your brand.
Indeed, marketing should remain a central plank of your business
strategy. If anything, marketing becomes more important and more
time-consuming as your organisation expands. So, in the next series of
Simply Business podcasts, we will be looking at the importance of
marketing – how to raise the profile of your business, how to build a
brand, and how to increase your customer base.
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