Learn how to grow a small business
So your business is well-established and you feel that the time is right to grow it in some way. But it can be difficult knowing where to start. You don’t want to head off in the wrong direction and risk jeopardising what you already have. But on the other hand if you simply stay doing what you are already doing then there is the risk that you may stagnate a little further down the line.
Get extra funding
This is top of the list as - whatever you decide to do - you are likely to need to invest more. There are various ways you can do this, including:
- investing previous profits back into your business
- taking out a small business loan
- selling shares to outside investors
- looking for other sources of finance, including government-backed schemes
Increase sales to existing customers
The simplest way to increase your sales is to sell more of the products or services you’re selling at the moment to the customers who are already buying them. For most businesses this involves:
- persuading one-off customers to become repeat customers
- finding customers who’ve stopped buying from you and trying to win them back
- selling more of the same products or services to your regular customers
It is essential to keep efficient records of who your customers are and what you sold to them. You can then work out who’s stopped buying from you, and who might consider buying more. Targeting these two groups of customers is often a cheaper and more effective way to increase sales than trying to find new ones.
Also ensure that you regularly review your prices and check them against your competitors to make sure that you are offering competitive prices. Changing your prices can be an effective way of increasing your sales, profits or both, but it is important to have a good estimation of the likely effects of price changes on the sales, cash flow and profitability of your business before making any changes.
Attract new customers
One way of finding new customers for your products and services is by increasing awareness in your local area. You can do this by:
- asking your customers to recommend you to their friends and colleagues
- advertising in local media
- using other forms of marketing, including digital marketing
- talking to potential customers who don’t use your business at the moment and find out what it would take for them to switch from your competition.
If you want to sell your product or service through new sales channels or markets elsewhere in the UK, there are different organisations you’ll need to work with, such as wholesalers, retailers - including online retailers - and distributors. To find new customers outside the UK and export your products contact UK Trade and Investment who can provide help and resources on successfully selling your products and services to customers in other countries.
Improve your products and services
If you’re looking to grow your business by improving your products and services, start by finding out from your current customers their views and what you could do to make your products and services more useful and valuable. What would encourage them to buy more? Getting customer feedback in this way should help you not only to identify ways to improve what you’re offering to your current customers but also attract new customers whose needs you weren’t meeting before.
It is important to be confident that any changes you make will increase your sales and profitability enough to justify the time and money you are putting in. If possible, you should test changes to products or services with a few existing customers during the development process to ensure that any changes you are planning to make will benefit rather than harm your business.
If you are not currently selling products and services online then this would be an excellent way forward. It can help improve efficiency and productivity, reduce costs and provide valuable communication channels for both customers and suppliers. You will also be able to access analytics software to help you understand how customers use your site and show you ways to make it more effective.
Develop new products and services
Developing new products and services enables you to sell more to existing customers and also be able to take advantage of more diversified markets. It can also help to spread fixed costs like premises or machinery. However it is important to test new products and services with your customers to make sure that there is a real demand for what you’re planning to sell, and to find out about any problems and fix them before you’ve wasted too much time, effort and money.
Adopt a simple testing process such as the following to help you get things right:
- talk to existing and potential customers to find out about their needs;
- develop a prototype as quickly and cheaply as possible;
- test it with customers and get feedback;
- find out what customers would be willing to pay: can you make enough money for a return on your investment?
- if there are competitors for your market, think about what will make your product or service better than what’s already available.
Hire and train staff
Whether you are improving existing products and services or developing new ones, as your small business expands, you’ll need increased capacity and skills to keep everything going. To achieve this you will need either to take on new staff or to ensure that existing staff are trained in the new skills that they need.
The advantage of taking on new people is that it enables you to spread your workload, expand production and take advantage of new and different skills and expertise. You may also want to consider taking on an apprentice which allows you to grow your capacity by investing in people who want to learn. Your business benefits from the skills they develop as they train both on and off the job.
You can also improve the range and level of skills in your business by training up existing staff. Giving staff training opportunities can increase their loyalty to your company and their productivity - as well as your profits.
Advice about employing and training people is available from the GOV UK website.
Work with a mentor
If you would like someone to turn to for advice then consider finding a business mentor who can help you develop your ideas for growth by sharing their skills, expertise, experience and contacts. Depending on the level of mentoring that you need you may be able to find some free mentoring or may need to pay. One source of mentors is the ‘mentorsme’ website, or Business mentoring if you’re in Wales. Mentorsme also has advice on how to pick the right mentor for your business.
At Fair Business Loans we wish you every success as you consider how to grow your small business. We have helped numerous businesses such as yours grow and expand: you can read more here. If you would like to discuss business funding with us then do get in touch and we’d be happy to discuss your requirements in more detail.