Growing your business can mean different things to different people. You may think of it as simply increasing your sales but it’s more important to focus on improving and maintaining your overall profitability.
Your long-term success will also depend on how well your business is able to keep up with the times and stay ahead of your competitors. Gaining fresh insights, generating new ideas, and solving problems both for your company and for your customers will all help your business to develop and survive.
This is known as the “front end of innovation”. If you’re ready to invest in your company’s future, making it more viable and profitable in the process, there are steps you can take to turn a simple idea into an incredible opportunity for growth.
Do your research
Never underestimate the value of market research before you start trying to figure out new growth strategies.
Make a list of your main competitors and gather all the information you can on their sales; finding out everything from their numbers of sales by product or service line to the types of customers they market to.
Then you can begin to compare the data you’ve collected against your own. Are you both fighting for the same customers? What seems to be the winning factor in these fights? Is there an important market your competitors may have ignored?
Once you’ve asked yourself these questions, you can work out what it is that sets you apart from similar companies. Then, it is time to start considering new growth strategies, and figure out how you will manage business growth.
Sell more of your product in your market
Increasing your market penetration is widely considered as the least risky way to help grow your company. That’s because this will most likely still be familiar ground for you since you’ll be dealing with your own products and your usual markets.
Boosting your sales can be done through investment in your marketing or by offering discounts or special offers. Your market research will come in extremely handy here as you can compare your volume of sales to that of your competitors.
Make sure you stay aware of changes in your market, such as the development of new products or services by another company, or a change in the attitude or needs of your customers.
Known as the market development approach, this strategy essentially means selling your existing products in an unexplored market.
This does carry a higher risk than market penetration since you’ll need to invest in market expansion without any kind of guarantee that you will make a profit.
Retargeting your advertising to appeal to a new range of clients can be expensive and you can never really be sure how successful it will be with your target audience in advance. Ensure you look at other markets your competitors are already exploring when you carry out your research.
Fortunately, since this strategy involves your existing products, you won’t need to spend additional funds on associated development and manufacturing costs; meaning your investment risk is reduced.
Product or service innovation can also go a long way to refresh your company’s image and help you grow.
Whilst you will need to invest more time, money and effort to develop a new product, it is likely that you’ll be able implement it into your business reasonably seamlessly.
Your existing customers might already be interested and benefit greatly from your latest product, so you may not need to invest too much in marketing either. As long as you understand what it is they need and want, and create something to serve them, your product could essentially sell itself.
Bear in mind that more time and resources may need to be spent training staff to use or understand the new product you have on offer, or they will not be able to sell it effectively.
Possibly the riskiest growth strategy you will come across, diversification involves selling a newly developed product into a new market.
That means it is unlikely either of these areas will be within your expertise. With no experience in selling your product or with the customers likely to purchase it, diversification really is a learning curve for any business owner.
But, if you can make it work, this strategy could grow your business exponentially. If no one else is offering a product like yours in this new market, you have the opportunity to establish yourself as a leader in that area. Offering a unique product or service also means you may be able to charge a premium.
Diversification also provides a safer bet if something were to go wrong in the market you usually do business in. Where other competitor companies may collapse should there be a lack of demand in the market, you won’t have all your eggs placed in one basket. This could be the difference between the success or failure of your business.
As your company grows, your responsibilities and liabilities will also change.
Taking on more staff means more wages to guarantee, and once your taxable turnover reaches more than £85,000 you’ll also need to register for VAT.
You’ll also want to work closely with your accountant as you try out new growth strategies. They’ll help you keep an eye on your day to day finances and cashflow whilst investing in and growing your company, ensuring everything keeps on running smoothly.
We can help
If you want advice from a team of accountants with a proven track record in helping clients expand their businesses, please call us today on 01932 704 700 or email your accounting partner at firstname.lastname@example.org.