Last Updated on Mar 12, 2020 by James W
The last few years have been quite rocky. Around the globe, the financial crisis saw thousands of small businesses and sole traders fail. Even a few of the giants, particularly in retail, were eaten up by the gloom and doom of recession. You gritted your teeth. You stuck in there and fought for your business. You may have lost staff. You may have lost customers. You may even have had to take a substantial drop in wages. But you are still here, and now you are ready to start expanding.
When we want to grow our business, there are several ways to increase revenue. We can find new customers, but this is tough. It involves meaty marketing campaigns and bidding processes to convince complete strangers to part with their cash. We could upsell or cross-sell to our existing customers, and convince them to do business with us again and again. This would involve extensive communications campaigns and Customer Relationship Marketing. As small businesses, few of us have the resources to instigate that.
Another option is to diversify into new sectors. This involves a fair amount of market research. It isn’t always advisable to move into markets you know nothing about, so try to think about related products or services. If you are selling socks online, it will be natural to move into pantyhose, shoes, and slippers. It isn’t a far leap to then move to sports socks and sportswear. From there, you could be looking at the highly lucrative sports equipment market. If you are in the sock business because you know wool and fabrics, then move into other markets that require a wool specialist, such as blankets, scarfs, and the textile industry.
There are plenty of linked products and services to whatever sector you are in. Without a thorough knowledge of them, you should research the markets carefully, and find appropriate data to determine if there is room for you. If you do decide to diversify, adding new products or services to your portfolio, you need to think about how you are supplying them. If you are in manufacturing, you may produce the new products yourself. If you are a retailer, you will need to find suppliers that will support your business as it grows.
Part of your diversification plans may alter the way you do business, and not just what you are selling. You may provide an online retail presence, but use drop shipping rather than acting as a warehouse. Your diversification may see you buying in bulk to save cost, and need you to find storage or warehouse facilities. If your business is looking to develop and grow in this way, you are likely to need to expand or move premises.
Operating from a new or expanded site and working in a different way, will generate enormous amounts of work for you. The site must be safe, and conform to any number of regulations. When you are excited about the prospect of a big development for your business, it is easy to forget the logistics involved. You will probably need to hire more staff, but do you know what qualifications they will require to be safe in a warehouse environment? If you are manufacturing, how do you source staff that can supervise usage of the new machines? With more staff working for you, are you required to provide canteens and rest facilities? What about safety wear and other equipment?
Managing risk assessments and compliance is a full-time job, and as a business owner, it can’t fall to you. You will need to hire an experienced specialist who can keep you, your business and your employees safe. They will need to coordinate with government bodies that will be checking you are not breaking laws or violating any health codes, and that your employees are properly trained.
If you are a small town small business, finding these specialists locally is hard. However, it is possible to outsource this work to a specialist health and safety company. They can step in and help you with your risk assessments and planning. Some even train your staff for you and help you recruit the right people. Praxis42 Ltd, and other compliance consultants, can audit and risk assess your buildings and business policies. Having specialist help outsourced like this could also save you money, especially if they can work multi-sites.
There are times when things in your business change, or things go wrong. Having an outsourced specialist provides an outside view when you can’t see the wood for the trees. Sometimes, as small business managers, we have too much on to provide our full attention to the issues of health and safety. It’s not that we don’t care or that we don’t prioritise our employees’ needs and welfare. It is purely a symptom of the times we live in that we all have to be multitaskers and all-rounders. We cannot afford to spread ourselves too thinly because that is when the cracks appear. And those cracks needn’t be restricted to the business. This economic environment leaves no room for error or negligence.
If you are surviving and even thriving in your small business at the moment, now could be the time to take a calculated risk and develop your business further. It will always increase your workload to grow your business, but it could be worth it to grow your wealth at the same time. Diversification is a great way to increase the reputation of your business as well. Your business could become a key employer in your town, and benefit from a good PR that surrounds high employment.
Don’t ever be afraid to ask for help. None of us know everything we need to know to run a business single-handed. Sometimes outsourcing is the quickest, easiest and safest way to rapidly grow our business. Specialist knowledge is hard to hire. Utilise a third party business while you are growing, and employ them to hire the right people when the new business is firmly established.
