A growth strategy involves more than simply envisioning long-term success. If you don’t have a tangible plan, you may actually be increasing the chance of losing business to competitors.
As such, it is key to be deliberate, figure out the rate-limiting step in your growth, and pour as much fuel on the fire as possible. But for this to be beneficial, you may need to take the following strategies into account.
(1) Don’t just charge in – make careful deliberations
James Hind, the founder of carwow, is a great advocate of sharing growth strategies. While being renown for suggesting success can be measured by whether you can achieve the standards set by competitors – and that benchmarking is an important process of business growth – he recently suggested that rushed decisions would only impede your scaling endeavour.
He said: “It’s extremely important not to rush ahead and jump the gun when trying to scale, because that ultimately leads to mistakes and can be counter-productive to your growth goals.”
When it came to carwow, Hind revealed that he knew prior to its launch that success in the market would rely on getting the right product to the right people one step at a time. Had the team launched all its manufacturers at once, it may have ended up having a negative impact on any future growth attempts.
“So, we launched Volkswagen first, sold 400 and got that working smoothly over a year,” Hind explained. “Once visitors could use the platform without any signs of a glitch, we launched Audi and nearly doubled the volume of sales within a few months. We kept this progressive rollout approach going until we had all of the brands on the site that we were aiming for.”
(2) Try your hand at franchising
From drawing up a financial disclosure document to figuring out what potted plants will line the storefront, when turning a business into a franchise the devil is in the details. The pay off, however, can be lucrative, as franchising is one of the best ways to spread a brand and grow a business quickly.
In fact, the British Franchise Association found that commercial failure rates for franchises are “incredibly small relative to failure rates for SMEs generally”.
This was according to its 2015 “Franchise Survey” alongside NatWest, which revealed that such businesses contributed £15.bn to the UK economy – an increase of 46 per cent over the past ten years.
Its no wonder then that Carl Reader, author of “The Startup Coach”, is a great believer of using the franchise route to foster growth.
He said: “Hundreds of UK businesses currently use franchising as a route for expansion; from sole traders to international corporates. Brands such as Toni & Guy started out as SMEs and embraced franchising as a way to achieve rapid growth. Wilkins Chimney Sweep, a stereotypical owner-operator business based in Newbury, has successfully franchised in ten locations.
“As the franchise bosses are putting their own money on the line, they are often far more incentivised than an employed manager in a corporate chain – and 97 per cent of franchisees report profitability.”
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(3) Recruitment at the top is crucial to success
In an interview with Real Business, Hind revealed that if he had the choice to do things differently, he would have placed a more rigorous recruitment procedure in place right from the start given that some initial hires ended up being a poor fit.
“My advice as an owner would be to recruit smart and make good use of your time,” he said.
However, nothing is more crucial to success than ensuring you have the right management team. This was echoed by the “Intramezzo Talent Capital Report”, which highlighted that not having the right board make-up would hamper business growth.
The quality and strength of the leadership team, it suggested, was cited as being crucial in terms of gaining investment, with 85 per cent of respondents claiming they would not back a company if it lacked such qualities.
“Having the right people in place to propel the business through its next phase of growth is crucial,” said Dermot Hill, CEO of Intramezzo. “A successful talent strategy is dependent on recognising whether the existing leadership team is capable of meeting not only current objectives but the longer term ambitions of the business.”
(4) Boost your business by exporting
According to a recent Real Business article: “As the UK economy starts to recover, export activity will be critical to sustaining growth.” So what’s holding SMEs back?
Statistics released by the British Chamber of Commerce (BCC) showed the complex regulations around tax, VAT and compliance that surround the export process often seems onerous to SMEs – especially for those trading for the first time. The situation is compounded by the fact that the rules around exporting vary from one market to another.
Catherine Raines, UK Trade & Investment’s (UKTI) CEO, explained that it comes as no surprise then that several companies hesitate before taking the export plunge. She added, however, that there was nothing for SMEs to fear.
“Some 85 per cent of organisations that have worked with UKTI said that exporting led to a level of growth otherwise not possible, whilst 73 per cent said that it increased the commercial lifespan of products or services.
“Firms that choose to export also report a 34 per cent boost in productivity in the first year, while the SMEs already exporting achieve 59 per cent faster productivity growth than non-exporters.”
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(5) Establish relationships with other businesses
Collaboration, CitySprint research revealed, still remains a key business survival tool for smaller employers in response to these threats such as increased competition, access to staff and regulation.
It found that 85 per cent of the UK’s 4.5m SMEs are collaborating with other businesses, sharing skills, expertise and mutual networks to drive the business forward.
In fact, 86 per cent of bosses said the collaborative partnerships with other businesses that had been forged in the downturn and tougher times have placed them in better stead for the future.
Of the research, CitySprint CEO Patrick Gallagher said: “With so many challenges ahead for businesses, pooling resources and talent is the best bet to achieve ambitious growth plans.”
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