Making the best use of your finances should be a key element in business planning and assessing new opportunities. For a growing business, it's crucial - cash constraints can be the biggest factor limiting growth and overtrading can be fatal Good cash flow control is important for any business. It's worth regularly reviewing the risks you face and developing contingency plans. Bear in mind that every new development brings with it changing risks. Watch out for being too opportunistic - ask yourself whether new ideas suit your strengths and your overall vision of where the business is going. Every major move needs planning in the same way as a new business launch. It's important not to assume that your current success means that you will automatically be able to take advantage of these opportunities. There are other strategic options such as outsourcing or franchising that might provide better growth opportunities. Diversifying your customer base spreads those risks.įollowing the same business model, but bigger, is not the only route to growth. There are obvious risks to relying solely on existing customers. See the page in this guide on cash flow and financial management.Īt the same time, every business needs to be alert to new opportunities. ![]() ![]() Newer relationships may increase turnover, but the profit margins may be lower, which may not be sustainable. Existing business relationships often have greater potential for profit and can also provide reliable cash flow. For example, your focus is likely to change from winning new customers to building profitable relationships and maximising growth with existing customers. See the page in this guide on keeping up with the market.Īs your business grows, your strategy needs to evolve to suit your changed circumstances. Market conditions continually change, so you need to revisit and update your business plan regularly. The plan that made sense for you a year ago isn't necessarily right for you now. You might do this yourself, or use a freelance researcher or market research agency. You may want to carry out extra research as well - for example, to test customer reaction to a new product. Effective IT systems can also make it easier to share and analyse key information such as customers' purchasing behaviour and preferences. ![]() You should encourage your employees to share what they know about customers and the market. Your suppliers and other business partners can be important sources of market information. Taking the time to talk to key customers pays off. You should be able to build up an in-depth picture of what customers want, how they behave and which of your marketing approaches work best. ![]() As a growing business, your own experience can be even more valuable. Published information can provide useful insights into market conditions and trends. At the same time, you need to invest in innovation to build a stream of new, profitable products to market. Understanding where your products are in their lifecycles can help you work out how to maximise overall profitability. A market-leading offer one day may be no better than average a few months later.Īpparently loyal customers can be quick to find alternative suppliers who provide a better deal.Īs products (and services) age, sales growth and profit margins get squeezed. The more you succeed, the more competitors notice - and react to - what you are doing. Otherwise you run the risk of making business decisions based on out-of-date information, which can lead to business failure. Business conditions change continually, so your market research should be continuous as well. Market research isn't something you do as a one-off when you launch your business. The challenges of growing a business - and how to meet them.
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