6 tips for expanding your business

As the UK economy inches towards a period of sustained growth, businesses can finally begin to look ahead with some optimism.

For those businesses that have survived over 6 years of recession and downturn in tact, their thoughts may be now turning to the next phase in their business cycle, growth and expansion.

Expanding a business creates a whole new set of challenges but it is important that your business doesn’t stagnate and is constantly moving forward. As this week is Financial Planning Week, it’s the ideal time to consider how you do this. Below, we outline 6 tips for taking your business to the next level.

Overseas expansion
If home markets are now saturated, seeking growth markets overseas is increasingly popular. Having the right product or service is only half the equation. To be successful in your chosen market requires a well thought through plan that maps out the full extent of all areas of risk that the company will be exposed to. Issues which must be followed through include how the venture will be structured, as well as issues on global patents, intellectual property and copyright issues.

Traditional finance is still not flowing at pre-financial crisis levels but having a realistic sales plan for projects will help, particularly if expansion overseas is planned. In particular, when seeking finance don’t overestimate sales or underestimate costs as it’s important to have sufficient cash headroom to manage the prevailing difficult economic climate. Also it’s important not to overlook a growing range of finance options that companies can tap into. These include specialist trade finance houses, venture capital funds as well as international banks. Don’t overlook the impact foreign exchange has on your finances. Either hedge the risk with formal instruments, or else minimise it using good business practice such as negotiating terms in your favour.

Social media
Making the most of social media to grow your business further requires a clear strategy. It’s important that companies know what they are trying to achieve by using it. Websites such as LinkedIn are fairly straightforward to use and are a great way of staying in contact with people. Twitter, however, is slightly more subtle and companies should give guidance to first-time users on how to maximise its potential. A customised approach often achieves better results. For example, setting up a Facebook page is not much use if the majority of your target market uses LinkedIn. A scattergun approach to social media can be less effective. It’s important to do your research and target your social media strategy accordingly.

Mergers and acquisitions
For any expanding business, it is vital to remain well connected to make the most of opportunities. Merger and acquisition drivers should always dovetail with a company’s own growth strategy and vision. For example, a business that wishes to expand in a certain location may find it preferable to acquire a business that already has a strong geographical presence in a chosen area, rather than building up a presence from scratch. Equally, a merger with a similar sized company can be a quick way to expand by creating one larger company. It can also be a good way to cope in times of financial crisis as a cost cutting and survival strategy.

Government funding
The government is injecting billions into UK companies looking to grow their business. But applicants need to get their ducks in a row if they want a slice of the latest round of funding. Consider grants from the Regional Growth Fund (RGF), as a successful award allows companies to accelerate growth in a way that they would not be able to achieve otherwise. Part of that preparation will include collating supporting documentation and preparing detailed projections to support any application. Don’t underestimate the time any funding application takes.

Expanding a business mean getting creative with your marketing plans. You will need increasingly innovative ways of attracting consumer attention and safeguarding customer loyalty. New and fresh techniques such as experiential marketing are gaining a popular following as a way to attract consumer attention through engagement, which can establish brand loyalty that can last for years to come. The entire premise of experiential marketing relies heavily on the company’s ability to create a memory in the consumer’s mind that is attached to an experience. What is vital to a successful outcome is knowing how to measure such a campaign and setting out in advance the right data to capture in order to measure your marketing strategy.

Mark Brownridge CFP