Growing your business is a significant decision to make for all business owners. It is a big commitment and often involves investing money back in to the business using previous profits, taking a loan or looking at other ways of raising money, including Government backed schemes.
There is some reassuring evidence just recently released confirming that smaller firms have improved their performance over the last three years and are successfully demonstrating business growth (according to a Kingston Smith study of 1,000 firms). The study found that 62% of small and medium sized businesses continued trading after three years while two thirds have improved their turnover, profitability and staff numbers, as their business has grown.
So what are the two main contributing factors to business growth?
Out of the thousand businesses that participated in the study mentioned above, 85% agreed that the two best ways to win new business and grow the company are to actively manage existing customer relationships and to attract new customers.
Let’s take each of those factors in turn.
Actively Managing Existing Customer Relationships
In this situation, you have made the decision to focus on the customers who have already bought from you in the past. It is important to manage and nurture these relationships and then persuade them to buy more of your product or service. This could involve encouraging these customers to repeat buy or just buy more of the same product or service.
It is also worth considering trying to win back your old customers by incentivising them or by just reminding them that you are still operating.
By keeping a database of your existing customers and their past purchases, you can use your resources more effectively and target specific customer groups you think are more likely to buy more from you or who would be happy to buy again.
Attracting new customers
Ways of finding new customers for your product or service could include targeting your local area, nationally or overseas. Firstly, we will look at:
a) Targeting your local area
By targeting your local area and increasing awareness you have an opportunity to attract new customers and ultimately grow the business. This can be achieved by asking your existing customers to recommend you to their friends, family and colleagues, by advertising in local media or by using online marketing e.g. Twitter, LinkedIn and Facebook groups.
Interestingly, the highest rated way of meeting new contacts and improving business relationships is face-to-face-networking, which can be achieved on a local or national level.
b) Targeting on a national level
To achieve national distribution of your product or service you would need to consider new sales channels namely, retailers, wholesalers and distributors and you could also try some direct marketing activity. It is also worthwhile considering building the sales skill within your existing team to be able to sell to new customers.
c) Expanding outside the UK
As a business, there could be opportunities to expand the business by selling to new customers outside the UK. UK Trade and Investment can help you with this which can be found here
For further information on improving SME business performance
For information on your pricing strategy
The Government website is also a great resource point for useful resources too