How to Grow your Business and Why this is Important
You don’t need to be an expert in the business world to understand that resting on your laurels can be detrimental to your success and profitability. While it’s an achievement to get a company off the ground, by then going through the motions you can not only inhibit growth, you could put your business at risk from a number of different factors.
So, if this situation is familiar to you and your current setup, or you’re considering starting a business and want to know more about your options, below you’ll find what you need to know. Here, we’ve detailed more about why business growth matters, different ways you can grow a business and how you can facilitate this.
‘Business growth’ explained
Firstly, if we look at the concept of this, it’s essentially the measure of the growth you can see in different areas of your business. This can be aspects like:
- How much profit you make year-on-year
- The number of new staff you take on and what responsibilities they have
- The amount of sales you make over certain periods
- If your products or services change or adapt
As alluded to here, how you measure this can vary from a weekly, to annual basis; often this is dictated by what area of your business you’re assessing for growth.
The Importance of Growing a Business
So why is growing a business so important? Ultimately, it can boil down to the fact that your company is constantly facing the threat of competition, and by staying small, you are essentially offering opportunities for others to take the lion’s share of your markets.
If you take this example from the UK Federation of Small Businesses, there were a ‘record 5.5 million private sector businesses at the start of 2016’ and the country’s SMEs accounted for ‘60% of all private sector employment’. This isn’t even taking into account the larger companies and corporations; which certainly suggests how there’s a pretty crowded marketplace out there.
Other risks you can face from these competitors if you don’t look to expand and develop – on top of losing out financially – can include:
- Having key staff members recruited by them
- Customers opting to use rival products or services instead
- Missed opportunities to diversify
Along with counteracting some of the above potentially damaging situations, there’s also the benefits that can come from growing your company. You can for instance:
- Increase your profits and market share
- Be able to access a wider audience
- Keep your product or service offering relevant to new markets
- Have the potential to attract new talent to your business
- Increase the loyalty of your existing customers
Options for Growing a Business
There’s also the old adage that you ‘need to spend money, to make money’ and while it’s always good to have a surplus of money in case of emergencies, if you don’t look to invest some of this then it will just sit in your company accounts benefiting nobody but your bank.
So, as well as the above examples for measuring business growth, there are a variety of other ways you can invest your money into growth and expansion. Here are a few examples:
Many companies choose to expand internationally, this could be through setting up a permanent business location in another country, or by beginning trading with other nations.
Online shopping now accounts for a significant portion of sales, the Centre for Retail Research for instance predicts that there will be upwards of £230bn spent in Europe and America in 2017 alone. What’s best about this option though is that you don’t always need to rely on your own company website, as there are a variety of already set up, online marketplaces you can use on behalf of your business – such as eBay, Amazon and Shopify, to name three major examples.
Another way you can grow is by expanding the types of products or services your business provides. Diversifying this way can open you up to more markets and target audiences.
This is where your business essentially sells (or in effect, leases) its concept to others. This allows you to set up new locations around the country and abroad under your branding.
Steps to Take for Growing your Business
If some of the above options look tempting to you, there are some steps you’ll need to take to ensure you grow your business effectively. This can cover:
Firstly, you need to create a business plan for your growth. This should detail what your desired expansion will look like and where you want to be within 6-12 months. These targets will be useful during your growth period for measuring your success. Your planning can also help you determine how much you might need to invest to put this all into action.
If you are planning on working abroad then there are other considerations to make such as overcoming language barriers, working around different time zones and instilling a company-wide ethos. You can find out more about how this works in this guide from TNT.
When budgeting, it can also be a good idea to put aside more than you think as you may encounter issues that require more investment to resolve during your expansion. The practical way to look at this, is that if you don’t end up having to use all your budget, you can then save or reinvest this in another area of your business.
When budgeting, you can also need to think about costing up the following tasks that you may need to carry-out:
- Recruitment – New staff may be needed to run or manage new sites, or to simply help with the increased workloads. You’ll also need to set aside time and budget for the application, interview and training process.
- Monitoring results – In order to fully assess the success of your growth you should be reporting on the results of this, but again this takes time, manpower and money. This is very important though and the more analysis you can afford the better, as you’ll be able to see where you might need to amend, or restructure your plan.
- Travel – This only truly applies if you are looking to grow your business internationally, or around the country. If you are running the operation it’s your responsibility to visit these sites and make sure they are working the way you want them to, in-line with your company ethos.
With this, you should hopefully have a better idea of what you need to do to start expanding your business and why this can be a great move for you and your company. The final piece of advice here is to start now, as every moment wasted could be another missed opportunity for you, so use this advice and get to work.
About the author:
Zak Goldberg is a Law & Business Graduate from the University of Leeds who has chosen to follow his aspirations of becoming a full-time published writer, offering his expertise on all areas of law, fintech and business.