Businesses are a bit like children. Once you've given birth to them, you never quite know where they'll end up. It may be that your business will tick along happily for many years, providing you with a comfortable and secure income, but not quite setting you up for early retirement. Or it may be that it ends up listed on the London Stock Exchange as a constituent of the FTSE 100 index.
Whatever your hopes and dreams for your business, you probably won't achieve them unless you have a plan to grow it. This might involve substantially expanding your market share, moving into e-business or even exporting to other countries in the EU and beyond.
Expanding your market share
Expanding their market share is what most businesses aim to do, but it is easier said than done. Nevertheless, there are some obvious steps you can take to grow your business's revenues, increase its profits and enhance its presence. Opening up in another location is one option, although you would need to consider the financial wisdom of this. It might be better to start selling through your website (see Moving into e-business below).
If you have a branded product, you could license it to other companies or you could diversify your existing service line. You could target another market or, if your pockets are sufficiently deep, take over one of your competitors and start serving their customers. Government contracts are another option as the government is encouraging small businesses to compete for public-sector contracts through its online service Contracts Finder.
Moving into e-business
We all know that the web is the way of the future and there will be an estimated five billion internet users by 2020. Indeed, the global e-commerce market is already worth a massive €750bn annually. If you have been using your website primarily as a marketing tool until now, think about using it as a sales tool. Companies such as World Pay offer online payment processing systems that accept multiple currencies.
At present, businesses that export make up only a small proportion of the UK economy, but those that do tend to reap the biggest rewards. In 2011, UK exports were around £300bn, according to the BBC.
The long lead times associated with shipping products and receiving payment can be unhelpful for the working capital needs of a mid-sized business. But there are some steps that you can take to achieve your international ambitions while minimising your financial risks:
- Factor in longer lead times into your cash flow.
- Make use of financial products aimed at exporters such as trade credit insurance, export working capital loans and hedging instruments that minimise currency risk.
- Choose a bank that can support your export objectives - one that offers products geared towards exporters or has branches in countries where you plan to do business. And make sure you have a good understanding of the bank's fee structure.
- Take advantage of the products and services available from UK Export Finance, such as export insurance and contract bonds.