Entrepreneurs typically share the same vision, to launch a successful business and grow it. It is no secret this usually involves selling more goods and services to new markets. However, as ever, the devil can lay in the detail.
According to business advisor and author, Ann Hawkins, one of the biggest issues can be when entrepreneurs find it difficult to step away from the proverbial coal face. It is only when they can get away from the ‘doing’ that they often have the time and space to generate new business and spot opportunities.
“A lot of people decide they need to grow their business when they realise they’ve just been ticking along, the same as last year,” she says.
“You can only grow by taking a step back and investigating how what you’re doing can be altered so you supply goods and services with better margins to new markets. I know an architect firm that moved into interior design for businesses because their research showed there were better margins working inside than on exteriors.”
Her top tip for all business owners is to set goals for growth. If you have no targets, she cautions, businesses just tend to chug along with no destination in sight.
From pipe dreams to a brand
This was certainly the case for Vince Rudgewick, co-founder of Clarity Heating. With the help of a business coach he went from a two-man business to employing six new people in just two years. He plans to treble his turnover in the next year. He claims the business’s success is down to the brand being taken more seriously by larger clients with bigger budgets.
“I realised the business wasn’t really going anywhere, it was just ticking along with the same revenue each year,” he says. “So I took the brave step to put down my tools and work on growing the business and hiring people to do the work. It’s a leap of faith but you have to trust that you can generate the work to keep your people busy. The big thing we’ve found is that when you set yourself to generating new business you become bigger, which means you can go for bigger contracts – it’s a virtuous circle.”
Focusing on an element of your business that has far higher margins can provide renewed growth through more efficient use of existing assets. That was the case for Sarah Miller, owner of Lady Penelope’s Travel in Great Yarmouth and Worldpay iStreet ambassador. She took a long hard look at the books and decided that the airport taxi runs she specialised in were simply not delivering growth once large overheads were taken into account. So, this year she switched to prioritising wedding car hire which, in turn, has led to a new potential revenue stream.
“Airport runs might seem like a lot of money to the customer but by the time you’ve paid your fuel and accounted for all the time it’s taken you to get there and back, it doesn’t make a lot of commercial sense for a company,” she says.
“We’re now concentrating on weddings because the work is local, so you don’t use a lot of fuel. A car can earn double what it would on an airport run. I realised this was a far better way of growing the business because people are still willing to pay for their big day whereas they are more reluctant to take a taxi to the airport. It’s also opened up a new market for us to set up parties and events, which we’re about to launch.”
Play time
For the larger company that is well known at home, exporting may well be the best way to fuel growth. It was the most obvious route for Cumbrian-based playground equipment supplier Playdale. Five years ago it was facing the end of a three-year programme through which the government had pumped approximately £2.5m into playgrounds. Managing director, Barry Leahey, knew this meant lower demand in the UK, so the only option was to look abroad. The company is now more than half way through a 10-year plan that will see it make half of its revenue from 40 countries by 2021.
“We knew the good times were coming to an end and we had to export, so we got in touch with UKTI and attended some courses and did lots of research,” he says.
“We looked at markets where there was a lot of demand and where our competitors were and prioritised those. You need to go beyond research and get boots on the ground. Go out and talk to distributors and customers to get a feel for the market. I’ve taken more than 400 flights in the past four years alone. You need to change as a company, culturally, to fit around customers. Our biggest overseas market is the United Arab Emirates and so, for example, they expect our people to be around on a Sunday to work as a normal day, so we have to work with that.”
For Playdale, Leahey reveals, growth has meant reaffirming what the brand stands for. Rather than compete on price, the brand is a premium player and that has influenced which markets it enters first and which distributers it picks. Only partners who are prepared to go through training to understand the products are considered and only customers who prioritise safety over price are approached.
For business advisor, Ann Hawkins, exporting is a no brainer that far too few British companies pursue. Once entrepreneurs have decided which products and services can best grow their company, the next stage should be to establish if there is demand abroad as well as at home. The potential for growth is limitless as new territories are added.
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