Growing your business
Doing well? How to expand
If you’re dealing with sudden growth in demand for your product or service, or planning for future success, there are lots of things to consider.
In this article we run through the considerations that come with expanding, hiring more staff or seeking major investment.
Options for growing your business
As you’re developing a plan for growth, speak to your bank to get advice on business plans, loans and other financial schemes that may be available to you, such as grants.
When you’ve an idea of the financial situation, there are some key ways to increase revenue:
- Sell more to your existing customers
- Sell to a new market – such as overseas or through the internet
- Develop new products for your existing customers
- Develop new products for new customers
There are pros and cons to each of these strategies, so it’s important to weigh them up when you’re tracking your course.
Selling to existing customers
Selling more of your existing products to the customer base you’ve already secured carries the lowest risk and can be one of the simplest ways to increase revenue. This may involve engaging regular customers and selling them more of what they’ve already bought, or contacting one-time customers and convincing them to repeat their order. As well as being an effective way to drum up more business, it can cost less than finding new customers.
Selling to new customers
The best way to find new customers is to market your business – that way, more people will become aware of your product or service. You can do this on a small or large scale, depending on the size and scope of your business. It may involve word of mouth, small advertisements or larger social media and online campaigns.
You may also wish to market to people overseas. You can learn more about selling to customers who are overseas in gov.uk’s UK Trade & Investment section.
Developing your existing products
If you’re thinking of developing your existing products in order to gain new custom and grow your business, you’ll need to pinpoint areas that require improvement. Speak to your current customers and find out what they like and don’t like about the product, and find out what might make them buy more in future. This sort of customer research can prove invaluable when developing products.
When you have improved your product, you may wish to increase the price. The extra revenue garnered from a higher price could cover the costs of improving the product in the first place, making it a worthwhile investment for you.
Developing new products
As with developing existing products, developing a new product should involve exploring your customers’ needs. Once you understand their needs, you can create a product that you know will be successful. You should also make sure that the market for this product isn’t already saturated – lots of competition means a bigger risk for you.
When you start to develop a new product, it’s wise to put it through a stringent testing process. Make a prototype and test it with customers – find out what they like, what they’d change and what would make them want to buy it.
How to plan for growth
When you’ve decided on the direction you’ll take with the growth of your business, it’s important to plan ahead.
Put together a credible strategy containing:
- Details of your product
- Description and analysis of the market or markets you plan to sell into
- A sales plan – including sales projections
- A marketing plan
If your focus is your current market, and you've been in business for a while, combine your historical sales figures (including trends) with wider market information. In the case of a new market, draw on third-party research on its size, growth trends and opportunities.
What to consider financially
Businesses often underestimate the amount of cash that will be needed to break into a new market, launch a product or even take on board a major supply contract. For this reason, you should consider the costs of everything and create a cashflow forecast as far ahead as possible.
If you’re considering approaching lenders or investors, then your plan will be even more important – if you can show a viable plan, you’ll know how much you need and where every penny will go.