Expansion can mean different things to small businesses. For some it’s about opening more bricks and mortar stores, for others it might mean simply moving from a small office to a larger one, it could mean expanding into international markets, or even broadening your remit and adding online services to an already-established storefront.
The question is: How do you know when – and if – it’s the right time to expand your business? If you consider the right timing, get your finances in place, research new markets and establish a customer-first culture you are on track to set your business up for expansion.
It’s all about timing
How do you know if it’s time to expand?
For b.box for kids – winner of the Top Exporter category at the 2016 Smart50 Awards and supplier of baby and children’s utensil products – it was all about the customer.
“One of the tell-tale signs for expansion overseas is when you’re getting a lot of interest abroad,” says co-founder Monique Filer.
However, she says, “Having a strong foundation in your home market so you can comfortably support yourself locally, is essential. Business owners can then take that local foundation to expand internationally.” The business now supplies its baby and children’s products to 22 countries.
Consider whether you should introduce new products and services
Continually reinventing your business’s approach will help you survive in a crowded marketplace, and that may mean bringing in new products or services.
If you’re committing to a product or service expansion, ensure you have good production capacity at a level that can support two markets, and that you can align the right logistics for dispatch, advises Filer.
“I also found the right partner – a trusted distributor that would do my brand justice.”
This strategy sounds relatively simple, but you need to identify what products and services your customers want, how much they’ll be willing to pay and whether you can sell them at a profit.
Do you have access to capital to support the investments required to grow? Should you burden yourself with more debt or seek more equity?
“[Finance] is an ongoing challenge for most SMEs. Entering a new market requires a huge capital outlay before you start seeing any return,” says Filer.
“You need to see whether sales from your current market can support your proposed market, or you need to look for investment. Essentially, you either self-fund or get investment,” she says.
“For example, at one point we looked into expansion and warehousing in Europe, but the capital outlay made it prohibitive.
“Those funds could be better used in product development or buying more stock; it was too risky at the time.”
Since you may not see profits for a number of months, you need to have the funds to continue running the day-to-day business until that time.
Ensure you budget and monitor your cash flow so you have enough to pay your creditors and enough profit to put back into the business.
Target new markets
Are you looking to enter new markets, either interstate or internationally?
“Thoroughly research the market you want to go into, your key competitors, the key markets and, most of all, speak to people who have done it before and learn from their experiences,” says Filer.
Customers and regulations are different in every market – you need to be equipped to deal with the culture of that market, and that means having team members with the right skills for operating in an international environment.
Maybe it’s not time to grow
Some business owners prefer to maintain their current level of operations as expansion doesn’t necessarily yield bigger incomes, and expansion is almost always accompanied by increased expenses.
You may feel your strategy is about keeping your core customers happy to gain longevity in your target market. And that’s OK too.
Written by: Thea Christie
This material does not take into account your personal and financial needs and/or circumstances, and you should seek appropriate advice (which may include property, legal, financial and/or taxation advice) before making any decisions or acting on any of the information contained in this material. To the extent permitted by law, all members of the ANZ group of companies disclaim liability or responsibility to any person for any direct or indirect loss or damage that may result from relying on the information contained or this site, or any act, omission or error, by any person in relation to the material contained on this site.
Looking to take your business online? If you want to expand your reach, this is a smart move – more than 86% of Australian consumers search for products and services online.
According to a 2016 Sensis eBusiness report, 60% of small businesses with websites believe that having an online presence has improved their overall effectiveness, primarily by increasing their exposure, followed by being able to provide customers with valuable information.
Whether you’re transitioning your bricks-and-mortar to an online-only business, or embracing online as an extension of your physical store, you can never be too prepared, says Head of Digital & Data Driven Marketing, Brendan Cooling.
“With a physical store, naturally you’d be required to learn about leases, staff and stock, but as an online retailer you also need to think about visual design, usability, navigation, and SEO tactics, to begin with.”
Here is a quick checklist to ensure you set yourself up for success:
Register a website domain name
“Your domain name is your website address or url that gives you an online identity,” says Cooling. “Ensure your domain name is original and represents your brand and your business.”
You’ll need to check it’s availability before your register it.
If your website is functioning not just as an advertising tool, but as an online store, here’s how to decide on the right selling platform, according to Cooling.
The cost: Calculate how much you can afford to pay for basic software each month, including account-related expenses such as hosting fees.
Ongoing maintenance: Do you have the time and money to build and manage an eCommerce site, or are you planning to have it maintained by a third party? Hosting your store on your own website gives you more control, but also requires the most maintenance and security to protect your customer data. If you can’t see yourself running an eCommerce store, consider joining a marketplace like Etsy, Amazon or eBay.
Payment gateways: Check that the eCommerce platform will allow for your preferred payment method.
First impressions matter: Establish a stellar customer experience
Imagine walking into a store to find the products thrown about, the paint peeling off the walls and the staff looking bored and disinterested. What would your first impression be?
Being online doesn’t always mean you plan on selling. If you are creating a website to act as an online shop front, the number-one consideration is still your customer, says Cooling.
That means showcasing your services or products with high quality photography, engaging content and information to build confidence and trust.
If you are selling, encourage the path to purchase by enduring fast page loading times on all devices, easy returns and great customer support, he/she advises.
“Rather than crowding your web pages with the entire product range and multiple categories, every page should be intuitively easy to navigate and aesthetically pleasing.”
Provide reassurances on privacy
“If you want to boost growth and reduce cart abandonment, anticipate and reduce frustration from errors at checkout time. This means good UX [user experience]!” Cooling says.
Make it clear that you use a secure online checkout service by using strong SSL (Secure Sockets Layer) authentication. Adding a trust seal can also increase your conversions.
Secure a high ranking
Once your website is in good shape, ensure customers can find you in the first place by devising a search engine strategy from day one. SEO increases your website’s traffic leading to a growth in your customer base.
Spend some time determining your site’s keywords and keyword phrases so it attracts relevant traffic, advises Cooling.
This material does not take into account your personal and financial needs and/or circumstances, and you should seek appropriate advice (which may include property, legal, financial and/or taxation advice) before making any decisions or acting on any of the information contained in this material. To the extent permitted by law, all members of the ANZ group of companies disclaim liability or responsibility to any person for any direct or indirect loss or damage that may result from relying on the information contained or this site, or any act, omission or error, by any person in relation to the material contained on this site.
When you opened your business, chances are everything was new and fresh. You had new processes in place, a cutting-edge logo and great products. Your business premises – if you had one – was likely smelling of fresh paint, with a new pot plant sitting on your desk.
Now, that plant might start overtaking said desk, growing out of its dated pot and shedding leaves all over your marketing materials that haven’t changed since you first took that whiff of fresh paint. If this sounds like you, it might be time to revitalise your brand (and buy a pair of pruners).
Not all small businesses think of themselves as a brand, but that’s what they are. Everything from your website and social media channels, to your packaging and customer service, represents your business brand. It is essential to make sure they all speak with one “voice” and represent the look and feel of your company.
Rebrand your marketing materials
One of the first things any tired brand should do is re-examine their visual materials. Part of redefining your brand could involve refreshing advertisements, creating new logos, or updating your packaging. Just be mindful that everything should stay in line with your core values and goals.
Ensure your marketing materials are consistent so that they share the same basic theme and information, and communicate the essence of who you are to your customers.
Your rebranding can be inspired by the narrative you decide to tell as you think about your product or services in new ways. Spin a new narrative around your product or service. Boost Juice isn’t simply selling juice – it’s selling a healthy lifestyle.
According to Ogilvy research exploring the most appealing types of marketing, customers most value marketing that provides ‘instruction’, helps people better ‘understand’ a message, or can provide information that helps with decision-making.
Evolve with your customers
Consumer preferences and technology change over time, and a business also needs to adapt to these changes.
Conducting market research, surveys or simply chatting to your customers as regularly as possible can help you can learn what your customers really expect so you can deliver.
“It’s important to clearly define your objectives in order to achieve useful results from your research,” says the WA Small Business Development Corporation. “Clearly defined objectives will help identify the best methods to conduct your research.”
We are now operating in a time where convenience is essential to standing out in a crowded market. This means you need to make it easy for customers to find you, your products or services, and – importantly – pay you.
If you have an online store you need to ensure you have the ability to offer a range of online payment options, provide assurances on security and privacy, and limit the amount of information you request.
Review your product or target market
Finding new markets or new customers can help you expand your business into new areas.
Depending on feedback from your customers, you could expand your existing offering or simply tweak what you have.
Take stock of what your business currently offers, and what products are performing well in which markets. Are you missing anything? Are there gaps that you could be filling elsewhere?
Think outside your existing customer base and about what you offer that could grow your business in new areas. Any strategy you devise should align with your core brand values so you can continue to build on it with other products and services.
Similarly, it is worth retiring any products or services that no longer align with these core values.
Small businesses and their brand must continually evolve to stay relevant, innovative, and competitive – especially given the fast-paced and agile environment we are living in.
While small business owners are busy people, it is essential to make time reassessing your brand and marketing efforts a priority.
The stakes are high – especially when it comes down to customer retention and acquisition.
This material does not take into account your personal and financial needs and/or circumstances, and you should seek appropriate advice (which may include property, legal, financial and/or taxation advice) before making any decisions or acting on any of the information contained in this material. To the extent permitted by law, all members of the ANZ group of companies disclaim liability or responsibility to any person for any direct or indirect loss or damage that may result from relying on the information contained or this site, or any act, omission or error, by any person in relation to the material contained on this site.
According to Business Victoria, 80% of businesses fail because of cash flow problems. Regardless of how profitable you are, or how many investors you have lined up, it’s vital you know how to manage your cash flow so you have a clear idea of the financial health of your business.
Here are our top five money-smart tips to help you optimise your cash flow.
1. Understand how much working capital your business needs to run
Working capital – the money needed for the day-to-day running of your business – needs to be managed closely. It is essential that you time your debits and credits so that you have enough to cover your expenses each month.
It is for this reason, that close monitoring of working capital is essential. You don’t want to be spending perceived profits if you can’t pay your staff.
Review your debtors: Have you credit checked your new customers? If you’re not being paid on time, develop good engagement processes such as providing accurate quotes and detailing payment terms.
Speed up invoicing and your collection cycle: Are you slow to issue invoices, or still writing paper invoices on the spot? Cloud-based accounting services or apps can help you generate and send invoices on the spot to get customers paying more quickly.
Take stock and review your inventory: Avoid holding stock or buying more than you need by checking stock levels before ordering.
Review your suppliers – take a look at your current terms and consider re-negotiating.
2. Create a budget and track results
A budget – or cash flow statement – will ensure you have the financial resources available to fund your business’s growth.
According to business.gov.au, “This cycle or pattern can help you plan ahead and make sure you always have money to cover your payments.”
It can also be a useful forecasting tool. Looking at past budget inflow and outflow trends can help you forecast any factors that could impact the timing of revenue.
3. Set up a business bank account
Many small business owners use their personal bank accounts when their company is growing.
However, there comes a point when it’s important to maintain a separate business bank account, especially if you’re trying to claim business-related tax deductions. Unless you’re a sole trader, your business will have to file a separate tax return at the end of the year and it can be a nightmare to sort out business income and expenses when everything’s pooled into one account.
Furthermore, keeping your personal finances separate from your business lends to your branding, credibility and professional image. Using a personal bank account for receipts and payments can concern customers and vendors – they may question your level of commitment and professionalism.
Bookkeepers and accountants can also get confused when sorting through transactions in your personal account, which can lead significant delays, affecting your cash flow.
4. Make it easy for your customers to pay you
From internet payment solutions to EFTPOS terminals, you need to offer options that make the payment process easy for your customers. Who wants to wait for a cheque to be processed?
Another way to speed up collection is by providing customers with incentives, such as a discount for paying on time or encouraging customers to pay on the basis that they can receive reward points.
5. Keep finding new business
Relying on existing customers can be a trap. If you’re feeling like your cash flow river has dried up it might be time to try to get new customers and grow your incoming revenue.
Look at your marketing strategy, especially your digital presence, and start getting savvy about business development. A refresh may be all you need to grow your business and increase revenue.
This material does not take into account your personal and financial needs and/or circumstances, and you should seek appropriate advice (which may include property, legal, financial and/or taxation advice) before making any decisions or acting on any of the information contained in this material. To the extent permitted by law, all members of the ANZ group of companies disclaim liability or responsibility to any person for any direct or indirect loss or damage that may result from relying on the information contained or this site, or any act, omission or error, by any person in relation to the material contained on this site.
In the fast-paced world of digital commerce, more than just drawing visitors to your website is required. The real challenge is converting those visitors into paying customers.
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