Businesses warned to make sure of growth strategies
Fact sheet offers advice on how to make your business blossom
As UK business closures increased by 18 per cent during the first half of 2004, a business group is advising firms to choose their growth strategies carefully.
The advice forms part of a new information sheet by accounts and business advisers, PKF, which offers practical guidance for small enterprises.
The sheet maps out four major business development options for small businesses at the growth stage and hopes to provide firms with a more focused approach.
The four options provided are:
- Market penetration – The least risky option that focuses on selling more existing products and services into your existing markets.
- Market development – or pursuing new market segments or local regions and assessing targets within the marketplace. Such an approach requires an understanding of different cultures, value systems, demographics and pricing points.
- Product/Service development – More important for businesses whose strengths are based upon their relationship with the customer or brand. It is important to be aware that the risk increases as you venture further from your own markets.
- Business diversification – A risky plan which involves increasingly evolving products and services but may be the option for business with the potential to balance high risk with a high rate of return.
Toby Stephenson, PKF partner said: “There is inevitably always a risk attached to every growth strategy, so businesses need to choose carefully and balance the risks versus the potential reward.
“Risks can be minimised by good market intelligence, a clear vision of where you want to be, a game plan for achieving it and a good advice from experts of your type of business.”