Some say the green shoots of growth are starting to appear in the UK sporting goods industry. Whether that’s the case or not, no business can afford to remain static when it comes to the products and services it offers – and small businesses are particularly well positioned to react quickly to changes in the sports industry.
Perhaps this is why, according to T-Mobile research, one in three small business owners are planning to develop new products or services in the next six months. It may be surprising to some that small businesses are optimistic about the future. As a small business owner myself, I’m not because I know that to be successful you need to see opportunity where others see challenges and reward where others see risk.
Some business owners are content to maintain a small operation they can run themselves in return for a decent, but limited, income. Others, however, are driven by the challenge of growing their businesses into a high profit operation with larger market share. Although higher risk, this path can generate greater personal rewards, including the pay-off that may come from selling a profitable concern.
Depending on your growth strategy, you might need to find the funds to expand. Your bank is the obvious starting point for a loan, but there are other options, too.
The government’s £30 million Growth Vouchers programme, for example, was launched last January and delivers subsidies to help businesses in England access the advice they need to help them grow.
The majority of small businesses that participate in this programme will be allocated vouchers worth up to £2,000 to spend on advice from suppliers in the private sector, matched with their own funds, in one of five categories of support, including managing cash flow, late payments and negotiating finance.
Other sources of finance include private investors such as business angels. They might be willing to invest in your company in return for a part share in it, but will tend to expect quick returns.
Asset finance companies will buy your equipment and lease it back to you, while invoice finance companies will buy your unpaid invoices, helping you to raise a lump sum.
In addition, friends and family might be willing to lend you money.
Don’t make the mistake of attempting to grow too soon, though. Instead, wait until you have a period of successful trading behind you to provide evidence that your business model works. This – perhaps along with some basic market research – will also tell you whether there is enough demand to justify expansion and give you time to put the systems in place to cope with an increase in scale.
Working to a development strategy will help you measure your progress. It should set out your methods, costs, targets and a realistic schedule, and you should revise your business plan to incorporate it.
Fast growth is easier to achieve in sectors driven by innovation and launching new products or services can fuel considerable growth quickly. Most businesses opt for a gradual, organic growth that is more manageable and involves less risk. There are a number of tried and tested strategies to achieve this:
• Sell more to existing customers. This may involve working harder to build relationships and taking on more sales staff.
• Attract new customers through increased investment in promotion and advertising.
• Expand existing sales channels or create new ones. This might include, for example, developing an online sales channel.
• Enter new markets. Exporting could be an option, selling beyond your region or aiming your offer at a new set of customers.
• Introducing new products or services to your marketplace can give you an instant edge, providing you have researched your market thoroughly and have a clear product strategy.
• Introduce new technology to your business. Better equipment can increase your capacity and has the potential to free up staff time if used efficiently.
• Create partnerships with other businesses. Sharing resources and expertise with another company will enable you both to flourish without overstretching yourselves.
• Successfully tendering for contracts can stimulate the growth that takes your business to a new level. As you increase your resources, you will be in a better position to win more contracts.
• Networking can introduce you to potential customers, business partners, investors and mentors.
Growth involves risk and commitment, but if well managed it should be achievable for most businesses. It will not necessarily happen quickly or enable you to retire next year, but every big business started somewhere.