Why Growth can Destroy your Small Business

Chart going through the floor

 

Small Businesses have a desire to grow – grow their sales, customer numbers and enter new markets. However unless you have adequate resources and a clearly defined strategy, then growth can lead to the demise of your small business.

There are many fine examples of small businesses that’ve exploded in size as they possess high growth potential. Angels invest, banks lend, crowds fund and external resources are ploughed into helping those companies achieve their growth potential – but not every small business has such significant growth potential. So before you contemplate growing your company, consider the following advice.

Resources

Resources are one of the key factors to consider when growing a small business which include:

  • Money
  • Manpower
  • Skills
  • Premises
  • Machinery & Technology

The obvious considerations are money, manpower, premises and equipment – but one factor often overlooked is the skills required to achieve growth. As a company grows the hierarchy, management and positions change so you need to consider if you have the staff with the right skill set to take on new roles. What skills do you need?  Can you train existing staff? Where can you find the staff with these skills and how much will it cost you?

Draw a list of all the above 5 key resource areas and calculate what resources you need if you achieve a certain level of growth – you’ll often find that right now you simply don’t have the resources available to facilitate your growth plans.

Existing Customers

Remember where you come from and who helped your company get to where it is – your existing customers. As a small business you can afford to dedicate more time and attention on each individual customer, but as you grow your time will be spent elsewhere.

To achieve growth you might want to explore new markets and offer new products in an attempt to grow your customer base. Stop and think about why you won those customers in the first place, what attracted them to you and why do they continue to be loyal customers?

Launching new products to new markets leads to a fundamental shift in your business model, so be mindful not to alienate your core customers at the expense of obtaining new ones.

Sustainable Growth

Grow too big too quick and you’re gone – you must grow sustainably. If that means it takes you longer to achieve your growth objectives then so be it.

To borrow or not to borrow? I have this romantic notion that commerce would be far more sustainable if companies didn’t borrow, but the reality of the situation often slaps me in the face. Borrowing is often the only way small businesses can fund new machinery, employ new talent or make essential repairs. However if you can avoid borrowing and achieve the finances you need over a longer time period, always choose sustainable organic growth.

You need to pay interest – every month and on time which increases the overall amount you pay to achieve the same results. An element of borrowing is outside your control. Interest rates may be at a record low but they will increase in the next year or 2 – yet again increasing the risk and cost of borrowing.

Do you think my advice hinders or helps growth?

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4 Reasons Why Social Media is Perfect for Competitions

sm contest

Small businesses can choose to spend their small Marketing budgets in a number of areas – Print, Digital, Radio, Advertising, Directories, Outdoor and many more. It can be a confusing web of options. Which method reaps the highest return on my investment? – Discard all those options and organise a competition.

Social Media is a perfect platform for running competitions – your competition is the magic bean and Social Media is the beanstalk. With careful organising you can get the competition entrants to grow your company’s Marketing, boost brand visibility and increase sales – here’s 4 ways your Small Business can leverage the benefits running a successful competition.

1)      Free Marketing

Firstly ensure that the topic of the competition compliments your own strategy – If you’re a hairdresser, then offer a pair of GHD straighteners, if you’re an Accountant offer a year’s free advice and so on. And of course you’ll need to promote the competition to the relevant audience – just make sure your prize is appealing.

Once you’ve decided on the finalists, run a voting system then watch Social Media explode! It’s amazing to see finalists of a competition embark on their own campaigns to get votes from their followers, meaning your company can leverage ALL connections from ALL their Social Media networks. Every time a finalist posts on Social Media – your company is included in the links resulting in driving traffic to your website. Once they’re on your website, enquiries and sales are a cert.

2)      Build a Database

When collecting votes for the finalists of the competition – make the voters enter their email addresses so you can build a database of relevant prospects.  Once you have built the email list you then need to align this with collecting Social Media details to build a complete profile of prospects.

Run a special voting day on Facebook, whereby people can simply click LIKE to place their votes. Now you can match the names and email addresses collected earlier to the Social Media profiles. With access to more in depth information about individuals you can build a picture of your ideal customer profile resulting in improved segmentation and targeting.

3)      Build Authority

Running a competition with a reasonably high cash value (or cash) will help to build credibility in your field allowing you to become a trusted company in your field.  Linking back to my initial advice, ensure you align the competition with your own company strategy. For example if you’re an Accountant who specialises in small business, then run a competition for the “UK’s Best Small Business” or something similar.

By making your company synonymous with a specialist area, you can build authority and become trusted and credible in your area of expertise.

4)      Integrate

When you launch your competition a key element in your strategy needs to be integration. Although Social Media is the key channel, ensure you adopt a multi-channel strategy. Place ads in relevant newspapers, advertise digitally and raise awareness of your competition – you need to lead people toward Social Media by integration.

Therefore by integrating your competition marketing and integrating the way you collect information from entrants and voters you can build a fully comprehensive database of prospective clients. Only 1 company can win your competition, so everyone else is a potential sale.

Have you ever run a competition on Social Media? Any horror or success stories?

Social Media Couch Potatoes

couch-potato

Social Media and the technology we use to access it is contributing to the creation of the Social Media Couch Potato. Staying in, sitting down facing the screen of a Smartphone, tablet, laptop or PC people are laughing, sharing and living their lives – all without talking, touching and intimacy.

Communicating through Social Media changes our habits and daily routines which impacts how consumers browse and buy products and services. Therefore as a small business if you understand how your prospects and customers are using Social Media, then you can connect with them when they want where they want.

Timing

When are your followers online?

7.30 in the evening are they sitting down to watch Coronation Street or Eastenders? 12.30 on a Saturday afternoon are they watching the football game on Sky TV?

When the 1st TV ad break appears or half time at the game, people will check their Social Media accounts – and you should send posts on Social Media at these exact times. You can use auto scheduling tools like Hootsuite, Buffer or Social Sprout to schedule posts for you at certain times of the day/week.

You might even be watching the same TV show or game as your audience, so find common ground and connect with them. If you’re a hairdresser you could mention a famous player’s hairstyle and promote a special offer for that style.  Has someone died in Coronation Street? Post about it to encourage your followers to comment – make real life connections, just don’t make everything you post about you and your company – be real and BE SOCIAL.

Turn Browsing into Sales

Shopping habits have changed with the birth of smart technology and Social Media fuelling a shift from Retail to E-Tail breeding a generation of armchair shoppers. What’s the point in going shopping in the rain, fighting for space in the car park in high streets with the same shops, brands and products as every other high street in the country?

Armchair shoppers are canny as they conduct research to shop around for the best deals available. Often people visit Retail premises, find something they like then go online to look for a better deal.  Social Media plays a significant role in purchasing decisions as potential customers ask their friends & family where to find X product, best prices and best websites. Regardless of how fancy and snazzy your marketing is, people trust their peers ahead of any brand in the world, so use this fact to your advantage.

Consumers will connect with their peers on Social Media and your Small Business needs to be heard to be part of that buying process. Use Social Media as an exclusive Marketing channel, offer specific ranges only and offer special deals that consumers can’t find anywhere else.

Tap into your customer’s peer network by offering say a 10% discount if they share your “special offer post”. This way you’re getting the customer to do your Marketing for you.

Find out when your followers are on Social Media to get your timing right, marry this with using Social Media as an exclusive Marketing channel and you’ve tapped into a market of Social Media Couch Potatoes itching to spend, spend and spend.

Are you a Retailer who struggles to compete with online competitors? Are you struggling to increase sales on Social Media? Tell me about any success stories or problems you’ve faced when selling on Social Media 🙂