Nothing is ever certain where the UK economy is concerned, but many indicators suggest we are entering into a period of sustained and impressive economic growth.
Broad economic growth means there will be plenty of opportunities for small business owners and entrepreneurs to super-charge the growth of their own business. Recent years have seen record levels of new business start-ups in the UK, meaning there are hundreds of thousands of new entrepreneurs looking make their venture a big success. So if now is the time to be a winner, how can you get ahead of the pack?
Over the last 12 months my business has grown its trading volumes by around 400%, we’ve doubled headcount, moved into a new office and expanded regionally across the UK. Investing for and managing rapid growth creates different challenges for all businesses, but there are some basics that apply universally.
For many business owners going after significant growth isn’t a priority, for some it isn’t even a distant wish – they’re happy with a comfortable stasis that pays the bills and brings in a nice income too. For others, growth is the name of the game. Personally, I always want my business to be growing as fast as possible. When we have a record month – which we often do – we celebrate it quickly and then set to working out how to break the record next month. I’m sure a lot of business owners will recognise this pattern of thinking.
To really put the foot down and seek rapid growth, you should first make a conscious decision that this is the right direction for you and your business. Going after rapid growth can be a stressful and risky process. Rightly or wrongly (wrongly, I believe) the UK is not a culture that celebrates or embraces business failure as an opportunity to learn and develop. Psychologically, business owners that really go after growth need to be prepared for failure and make sure they can benefit from it.
Psychologically, business owners that really go after growth need to be prepared for failure and make sure they can benefit from it.
With the decision made that rapid growth is the right option for you and your business, you can set about your plan. Rapid growth usually means investing to generate a significant increase in customers. Where will these customers come from? Why will they be interested in your product(s)? How can you reach them? The answers to these questions should inform your growth options.
You could look to export into new markets, domestically or internationally. We work with a Derbyshire based headphones and earphones manufacturer called RockJaw which is now exporting its British manufactured products all over the world – including into Japan. They knew their product had international appeal and so invested in reaching out to new markets. RockJaw is a great example of a British company using high quality British labour and materials to reach out into new markets.
You could expand your product base. Offering new products to existing customers can be a lucrative way of creating rapid growth, because you don’t have to create a new customer network, or pay for significant new customer acquisition.
Another, perhaps simpler way of creating rapid growth is through investing more money in marketing. To do this you need to be confident that you have not already saturated the market for your business and that driving greater awareness will lead to more customers.
Rapid growth can be chaotic and exciting, but it needs to be managed as carefully as possible. Plan carefully for scaling up your company. How many staff will you need? Will you need to move offices? How will you manage recruitment, if you’re also running the business?
Another pitfall of rapid growth is maintaining control of your business. My business has grown from 23 people to 50 in just ten months and it can be hard to let go of certain things. An important piece of advice I received was to make sure where I did delegate tasks that I had total faith in the people I hired to carry them out.
Plan also for your finances. You might be able to sell more products at a good profit, but that’s no good if you won’t have the working capital to pay staff and suppliers. This is especially important for businesses selling into large corporates who can take up to 120 days to pay invoices. Having good working capital flows in place is crucial to any growth strategy. Most of the businesses that use our invoice trading, are in a process of growth but need the working capital in order to really push down on the accelerator.
Super-charging the growth of your business is a big challenge with lots of hurdles along the way. The margins between success and failure can be slim. To maximise your chances of success, you have to have a clear plan in place to know where the growth is coming from and how you’ll manage it when it comes.
Co-Founder of MarketFinance