If you are looking to expand your business or are reviewing your growth strategy, here are some key things that you need to do:
- Price it right
Generally speaking, there are three methods of pricing goods and services: cost-based, competition-based and value-based. The first approach involves calculating your costs and adding desired profit on top of that; the problem with this method is that it may leave you at the mercy of variable costs. Competition-based pricing, on the other hand, takes into consideration rival companies’ pricing structure – which might not let you differentiate your business in the market. Value-based pricing, however, allows you to set prices according to what customers are willing to pay, as well as customer price elasticity. Encouraging customers to purchase at prices that they are happy to pay results in a situation in which both a business and its customers are the winners.
- Manage your costs
Costs need to be reassessed regularly to ensure that you are not spending more than is necessary. This is a complex process that requires not just a financial review, but a reassessment of your operational systems and processes. You may come across ideas for growing your business as a result of this. For example, a business that is retailing on the high street may find that it wants to expand, but does not have the capacity to open another store. It might, however, be possible that it would be cheaper for the company to expand online. Businesses trading overseas will also find that cutting on currency costs will improve their bottom line.
- Increase sales
Businesses understand the importance of getting the customer journey and sales process right – the tricky part is figuring out how to do it. The best processes are tailored to your specific industry and business. There is a wealth of information available on this topic; as a general guideline, businesses should aim to persuade one-time customers to return, identify customers who’ve left in order to win them back, and sustain the interest of regular customers.
- Access additional funding
Perhaps organic growth is funding your growth strategies, or perhaps you require additional funding to kick-start your business growth plans. Besides sourcing funding from ‘traditional’ sources like banks, businesses can also look to alternative methods of funding, such as invoice finance, peer-to-peer lending (also known as crowdfunding) and seller financing.
- Enhance current products and services
Market research does not end with product development and trialling. It’s important to have your pulse on consumer sentiment and know what your customers want. Whether you’re reaching out in person, requesting feedback, or sending out surveys, keep tabs on how customers feel about your product or service – this allows you to consider if it needs to be refined.
- Research and Development (R&D)
In order to expand, you may need to diversify your offerings. Even a company that has only one product may have to upgrade when technologies or fashions change. Small and medium enterprises can receive tax credits on R&D in the form of cash, whereas larger companies can apply for R&D Relief. The latter is available to companies that pay corporation tax and that are engaging in R&D.
- Branch out
Sometimes the best way to increase footfall is to increase your coverage. Your business may require new office space, warehouses, factories or stores. This sort of investment poses a significant barrier to entry in terms of property purchases or rentals, but may be necessary in order for your business to grow. Branching out could also be a cheaper alternative to opening new stores or offices.
- Expand internationally – export
Exporting can open your business up to whole new markets, and extend the life cycle of your product or service. Besides the opportunity to increase your sales and, by association, your profits, you can also reduce risks caused by economic shifts. For instance, a recession would hit your business hard domestically, but this blow could be softened by sales in overseas markets. Expanding overseas can also help your business to lower unit costs and enjoy economies of scale. Businesses that sell goods or services seasonally will also find that they are not restricted to sales in a particular season. A coat manufacturer, for instance, may see more domestic sales in winter than in summer. However, it can sell its wares to customers experiencing winter elsewhere in the world when it is summer in the UK.
- Expanding human resources
Business growth will usually require more work and resources than you currently have at your disposal. Invest in your human resources to ensure that you hire staff (to take on any additional responsibilities) who buy in to your company’s aims, values and culture.
- Forge partnerships
Two heads are better than one, as are two pairs of hands. There are two main types of partnership that can help your business to grow. One is via exposure to new contacts (and potential clients) through your business partner. The other is through joining forces with them to produce something – whether it’s an event, educational content or marketing material.
- Seek guidance
There exists a wide-ranging breadth of growth strategies. It is often helpful to seek guidance to help you to simultaneously narrow your focus and view the wider picture. This could take the form of asking trusted family and friends to be a sounding board for your ideas. It could also take on a more structured path navigated by professionals. Smart Currency partner, GrowthAccelerator, for instance, offers guidance from growth specialists who will connect you with new contacts, find new paths to investment and brainstorm ideas for expanding your business. Meanwhile, Advantage Business Partnerships (another Smart Currency partner) offers businesses coaching, mentoring, consulting and training in order to help companies thrive and grow.
Growing a business strategically is a complex process – one that requires time, patience and the wherewithal to withstand the challenges that get thrown in your way. However, growth is essential for helping businesses realise their full potential – and to keep raising the bar once this has been met.