Following from our two previous blogs from our Birmingham accountants on how to manage cash flow in business and exploring ways to reduce overhead costs, we turn our attention to business growth advice on how to overcome growth challenges as a business owner.
Business growth challenges
Growth is change and as a business grows it requires more processes, controls, and people.
Too much growth too quickly can expose frailties in controls creating financial, quality, and reputational risks.
If the risks are not properly managed, they can ultimately lead to the demise of the business. Monitoring all of these factors can easily overwhelm business owners.
Business growth opportunities
We are living in an era of constant change with uncertain economic conditions surrounding the outcome of BREXIT negotiations for the foreseeable future: change is the new normal.
Preparing for that change by investing in the right kind of business growth advice is the best way to meet these challenges head on.
What are the strategies for business growth?
Planning is key to any business.
Planning for growth is vital.
You need a vision of what you want to achieve and a plan to get you there. It’s sensible to review your current performance on a regular basis (e.g. Monthly or Quarterly meetings) and identify the most likely strategies for growth.
Part of getting from A to B, then, is to put together a growth strategy that brings you the most results from the least amount of risk and effort. Four basic examples could be:
- Market Penetration – The least risky growth strategy for any business is to simply sell more of its current product to its current customers—a strategy perfected by large consumer goods companies.
- Market Development – Devise a way to sell more of your current product to an adjacent market—offering your product or service to customers in another city or state, for example.
- Alternative Channels – This growth strategy involves pursuing customers in a different way such as, for example, selling your products online.
- Product Development – Selling products to your existing customers is far less risky than “having to learn a new product and market at the same time. A classic strategy, it involves developing new products to sell to your existing customers as well as to new ones.
Developing a Growth Strategy: Integrative Growth Strategies
If you’ve exhausted all steps along the Intensive Growth Strategy path, you can then consider growth through acquisition.
- Horizontal. This growth strategy would involve buying a competing business or businesses. Employing such a strategy not only adds to your company’s growth, it also eliminates another barrier standing in your way of future growth—namely, a real or potential competitor.
- Backward. A backward integrative growth strategy would involve buying one of your suppliers as a way to better control your supply chain. Doing so could help you to develop new products faster and potentially improving margins on product lines.
- Forward. Acquisitions can also be focused on buying component companies that are part of your distribution chain. For instance, if you were a clothing manufacturer or wholesaler, you could begin buying up retail stores as a means to pushing your product at the expense of your competition and improving profitability.
Birmingham business growth advice
The best way to improve your business growth is to seek professional business growth advice. At Haines Watts Birmingham, we believe that with effective planning and careful assessment against your strategic goals, business growth can be achieved. For more information on our accountancy services in West Midlands then contact us today.