Businesses must start from an idea and are not simply successful from day one. To grow into a successful business, founders look for ways to expand their idea and seep into new markets, which in turn will increase revenue. There is no secret to growing a business, yet many business owners tend to make a series of mistakes, leading to their demise.
Are you confident in your people?
The people in your business form the base of any business. No business can reach their full potential without building a loyal and hard-working team at the core. These people are the ones who will help to turn your idea into a successful business.
The process of recruiting and finding the best talent is never easy. You must over-invest time in the process as it is a fundamental investment and future growth driver. Two principles I have learned over the years when looking at recruitment are, to surround yourself with people who are better than you and do not be afraid to recruit someone who could make you redundant.
The time you put into these people will pay for itself, the benefits of a stronger talent pool are endless, including a built-in succession plan and better business results due to a mixture of voices with innovative ideas.
Have you over complicated your strategy?
As mentioned, businesses grow from an idea or a vision of something which needs to be developed, therefore this must be supported by a strategy. An over complicated strategy will be hard to follow and may not give you a clear road map to reach your goals, so keep it simple.
In thirty plus years of corporate life I have reviewed many. Countless textbooks have also been written on the subject, but there are some basic principles that I firmly believe work best. Namely, the vision should be clear, motivating, and understood by all in the organisation. In addition, it’s important to remember ‘less is more’. Too often strategy papers can be voluminous and complex. The best strategy work I have seen is on one piece of paper with clear, simple articulation of the choices you will do and equally what you will not do. It is very empowering to tell a team what you are not going to do.
Does your new market relate to your core?
Before you begin to expand into new markets it is important to ensure your core market is strong and profitable because expanding will require investment of time and money. The core pays the salaries and the business drivers so you must not begin to invest significantly in new products, geographies or services unless the base is strong. This is another seemingly obvious point, but there are thousands of examples where enthusiasm to grow has caused companies to fail.
As you do evaluate expansion, having an array of ideas and opinions needs to be balanced with a clear brand that consumers feel they relate to. Whilst adding new products or services is an organic part of company growth it needs to be tempered, so you do not drift too far from your core market.
Therefore, before ploughing resources into new markets, you do need to ensure that new product and services will be of value to existing (or new) customers. You may need to ask some critical and challenging questions such as, is there a clear need for this? Is it marketable? Does it sit within the brand equity? How much will consumers pay for it?
If you conclude that the demand is there, only then should you move onto executing that new idea because it will require a significant amount of investment of time, resources, and money. If the market entry cost is potentially high, you should also evaluate a test & learn approach by launching in a limited way and, if early traction is good, then expand.
Once you have revised your existing offering to appeal to a wider audience, you need to engage with these new consumers to increase brand recognition. If your business is not online, add this to your to-do-list because in today’s era, convenience is key and it has never been more important to maintain an online presence.
A website is the shop window to your brand and, done well, can allow you to build up a direct one-on-one relationship with your customers. If it was already an important criterion before, the impact of Covid-19 will make it absolutely indispensable as our shopping habits are likely to shift even further to direct, online sales.
With social media and the abundance of mobile technology, it is not difficult nor expensive to drive traffic to your site, so you need to ensure the site is engaging, easy to navigate, informative with a call to action to purchase. Loyal customers who return to your site are worth their weight in gold!
Do you have cash reserves in place?
Without a healthy working capital the day-to-day running of a business is not possible, let alone business expansion. You must always keep a ‘rainy day fund’ for when something goes wrong, even if you developed a stable business. This has caused thousands of start-ups to fail as they hit unexpected turbulence and had no contingency in place.
In today’s global economy, there is a lot of uncertainty so there has never been a more important time to maximise liquidity to meet short term obligations and avoid going bust. Not to mention, flexibility is key when a business is looking to expand and without enough working capital a business can lose this flexibility which in turn can harm the ability to exploit new business opportunities.
Overall, whilst there is no single formula, going back to the basics of businesses is a good idea when looking to expand. This means paying close attention to the team you have surrounded yourself with, do they share your vision and passion? In order to attract the right people, you will likely have to give back and invest into your team. Secondly, to underpin your vision, design a strategic but clear road map to success. And finally, use your core market as a gage for new markets in order to not drift away from the brand culture you have developed.