FOCUS FEATURE
GROWING YOUR BUSINESS
In the 18th Century Benjamin Franklin supposedly quoted the phrase “If you fail to plan, you are planning to fail!”. Two hundred years later this mantra could well be applied to businesses seeking growth. From start-ups to scale-ups, those that make growth plans
are much more likely to succeed if the people, processes, skills and working capital required are given careful consideration. Without preplanning there can be major risks associated including diversifying too far and too quickly and failing to realise the full potential of the core business. Business survival is tough and if a company is not
growing, it is declining. However, the rate of growth is something that must be carefully managed and above all, planned.
CONSIDER YOUR OPTIONS It is important to decide if you want to strengthen your business' position or find ways to grow. Once you have assessed your current position and how well equipped you are to handle business growth, you can start building your growth strategy.
TYPES OF GROWTH Determining the best way to grow your business not only requires careful planning but also a good understanding of the different ways in which a business can grow. Slow, organic business growth is basic, but arguably the most effective means of growth. Rapid business growth, on the other hand, may be more profitable but often involves significant risks. Organic growth typically takes longer than other growth
strategies but tends to be safer as you grow by doing more of what you are already good at. There is also time to develop the right capabilities to support and manage business growth. Rapid growth normally occurs over a short time scale and
is often in response to an unexpected opportunity, for example a new contract, or it can be down to a successful growth strategy. An example would be a food producer that secures that much-sought-after supermarket contract. The orders flood in, production is ramped up, staff are put on extra time, costs go up, machinery can’t cope with the demand and soon the business is overstretched and fails to meet its contractual obligations. The sudden growth
becomes too much, and the business becomes insolvent. If a growth plan had been put in place the business would have worked out its economies of scale to ensure that the right resources were put in place to meet customer demand. One way to achieve rapid growth while minimising risk is
by buying another business. This can either be buying the whole business or just investing in part of it. The business may be one of your competitors, or one that complements the range of goods and services you supply. Again, a well thought out and developed plan is critical before any acquisition and the impact on the existing business must be considered.
DOWNSIDE OF GROWTH So, the threats of having a poor business growth strategy are numerous. Lack of capital can lead to growth being stunted or even put the business at serious risk of failure. Poor management skills will quickly become apparent leading to a dissatisfied workforce and damaging customer service. Insufficient data analysis and market research will affect key areas such as cashflow and inefficient processes will soon start to show during a growth phase. A lack of focus on the long term from working in the business, rather than on the business, is potentially disastrous.
THE GROWTH ADVANTAGE For those companies which do plan for growth, the opportunities and rewards can be great. Moving into new markets or exploring unique territories can strengthen your brand and give scope for innovation. Securing that big contract can help you to reach economies of scale as higher volumes lead to price reductions on raw materials. Additional skills can be added to the business which can create greater opportunities for diversification and saves on outsourcing specialist support. Increasing market share can help eliminate or reduce competitor risk and the visibility of the business is improved which can help attract the right talent and financial investment. And for the local and wider environment, successful growth brings stability, prosperity and stronger economies.
SCALING UP The latest statistics from the ScaleUp Institute show that the UK’s total number of scaleup businesses - i.e. those
Is growth a step up for business?
By Fiona Shepherd (pictured), Marketing and Communications Manager, D2N2 Growth Hub
46 business network February 2019
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72
