In this podcast, Josh Hall talkes about the challenges associated with growing a business. Listen to the podcast or read the podcast on this page.
[Powered by Podbean.com] ## 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 services. 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. : http://www.podbean.com