It’s no secret that growing a small business is difficult, particularly in this current economic climate.
Small- and medium-sized enterprises (SME’s) account for 99% of the current corporate ecosystem in the UK with a combined annual turnover of £2 trillion. Despite this, the business population saw a -0.5% decrease between 2018 and the previous year.
The fact is not all SMEs do well. It’s said that as many as 30% of SMEs fail during the first two years of operation. However, promising start-ups continue to succeed in a volatile market, which can only equate to one thing – having a better organic growth strategy that’s unique to your business.
Successful business strategy
A comprehensive and considered business strategy is one of the most vital aspects of business, and for small businesses where competition is rife and casualty numbers are high, effecting a tactical approach to growth is one of the keys to success. This is easier said than done, however. If the path to success were a simple one, everyone would be taking it. The fact remains; a successful small business requires a successful business model. Without the necessary elements for breeding growth, particularly organic growth, a start-up is bound to fall by the wayside. In a world where great ideas are the most valuable commodity, and innovation is the primary currency, it’s important to recognise and understand your business and realistically assess its chances of succeeding.
What is organic growth?
In general terms, growth is defined as the increase of an entity’s size, whereby its output, infrastructure or value has developed further than what it was initially. When we talk about organic growth, we really mean increased output, enhanced sales and larger reach achieved through internal resources and processes. The word ‘internal’ is key as the focus here is on growth happens around natural product development or market development, as opposed to using external financing to develop and grow a market, which can potentially risk the financial stability of the company.
To build a business organically should be the primary goal of anyone entering into a small- or medium-sized venture, as it constitutes the belief in and value of your respective company.
Organic growth, therefore, is the expansion of an entity that is achieved on its own. There is no reliance on exterior forces, mergers or acquisitions as a means of consolidating your business and becoming bigger by association. Organic small business growth is a reflection of good business practice, solid considered business strategy and an aggregation of hard work, and typically doesn’t happen overnight. Usually, it’s in these foundations that small businesses are given an indication of their success over a significant period of time, and can often be a good indicator as to whether they can sustain the growth and be successful in the future.
How do I grow my small business?
Considering there were 5.7 million SMEs in the United Kingdom in 2018 from a myriad of industries, disciplines and professions, how one should grow their small business and what constitutes success in such circumstances can be hard to gauge. In short, there isn’t a standard recipe that can be applied uniformly to business growth and guarantee success. More often than not, growth is reliant on the quality of your business model, your comprehension of finance matters, how you execute your business strategy and even your ‘idea’ that’s behind it.
While your specific circumstances dictate the relevance of these strategies, at Berley, our business growth experts have helped many SMEs across London to thrive and in this post, we aim to discuss three typical ways which you can implement to spur organic growth in your small business:
Innovate a new product or service
Pushing the boundaries and disrupting the status quo has led to the fruition of some of the most successful businesses. Identifying a niche in a market or developing a ground-breaking idea is undoubtedly one of the most effective mechanisms for breeding a successful start-up. However, not everyone is capable of thinking up the next Google or Uber. If you run an established business, then re-evaluating your business model should be considered. Ask yourself:
- Can you develop new products to complement your current portfolio?
- Can you conduct market research to identify gaps in the market and assess whether you can fill them?
- Alternatively, can you shift your business’s focus toward high-value customers and analyse the impacts this has on your business’s performance?
As the market evolves, new opportunities emerge and if you’re willing to adopt and adapt, you’re already ahead of the game and are likely to seize the right moment before anyone else.
Invest in what’s working in your business
It’s an age-old adage, but you really do have to spend money to make money. Evaluating your company’s positioning and health, assessing your high-growth and most profitable areas and attempting to recognise where you are underperforming are all requirements for businesses looking to invest in themselves – thereby investing in their growth and success. If a product or service is performing well, you may want to limit expenditure from another area of your business, advertising for example, in order to target the high-performer and boost its efficiency. Sometimes developing a quality product is more valuable than developing a campaign.
Increase your business or product efficiency
If possible, implementing strategies to improve your business’s effectiveness and efficiency should be undertaken. Evaluating your commercial operations, from sales to marketing, you need to be able to take a step back and understand what is and isn’t working for your business, and do so from a critical standpoint. For example, technology can be a major driver of organic growth. With the majority of internet users now surfing via mobile devices, consider making your website mobile-friendly and marketing on social media can help to optimise your business.
Talk to Berley about organic growth today
As specialists in small business growth, Berley has a proven track record of delivering effective and efficient growth strategy advice that caters specifically to your small business. The support we offer is tailored to your growing company’s needs. We’re chartered accountants who don’t just generate numbers for our clients; we work with you to generate ideas.
For more information on how we can help your business grow, call us on 020 7788 8261 today.
If you found this interesting, you might also like:
- Business growth in 2019: Expert advice for small businesses
- Challenges of business growth and how to tackle them
This post is intended to provide information of general interest about current business/ accounting issues. It should not replace professional advice tailored to your specific circumstances.