Once established, many start-up owners begin thinking about how to grow their business, but it’s hard work and the UK is still operating under difficult business conditions.
According to UKBI, a professional association for start-ups, only 30% of small and medium-sized companies registered survive for longer than five years.
So, how do small businesses not only survive, but thrive in these tough economic times?
Plan, plan, plan
Some entrepreneurs either don’t like planning, or don’t feel that they’re able to spare the time for it. Following your gut instinct and making ad hoc decisions might have been enough to turn a new business idea into a start-up, but growing a new enterprise into a sustainable business requires a lot more thought.
Developing a business plan should ideally be the first thing you do before starting a company. This plan should be a work-in-progress document that gets revised on a regular basis – at least once a year. Your business plan will not only act as a guide and provide your staff with a common understanding of your goals, objectives, tactics and resources, but it will also act as a benchmark. What’s more, if you’re planning on getting a bank loan, government funding or venture capital, you’ll definitely need a business plan.
Look for passion when you’re hiring
When you’re hiring staff, it’s hugely important to look for the right personality – not just skills and education. Passionate people who believe in your mission and in you as a leader will help you grow your company.
Get the right systems in place
Lots of businesses worry about “worst case scenario” planning for when they don’t have enough customers to sustain business. Intelligent businesses also consider “best case scenario” and plan systems and logistics to cope with a sudden spike in activity that not only meets demand, but protects the quality of their products and services. In short, ensure you consider all eventualities.
Location is key
If you’re running a ‘bricks and mortar’ business that relies on footfall, then location will probably be one of the most important factors in your success or failure.
If you’re currently based in a co-working space or business incubator centre and are planning on expanding, then choosing a serviced office space is probably the best option as it means that your office can ‘grow’ with you. Here at Flexioffices, we have thousands of office spaces in our online database which is searchable by a variety of factors including location, street, town, postcode, public transport and country.
Watch your cash flow
If you don’t come from a financial or accountancy background, ensuring you protect your cash flow is easily overlooked. Knowing when money is flowing in and out of your business is crucial. Business success doesn’t just depend on having future orders balanced against your business costs, but on actually being able to pay your monthly bills. You may well have a huge order dropping into the next calendar quarter, but if you can’t pay your team’s wages to supply the work booked in, your business may not survive in the interim.
Listen to your customers
Consumer behaviour can change over time and can follow certain trends that might affect your business or industry.
Talking to your potential customers to find out what their actual needs are, what motivates them to buy from you and what they think about your competition is something that you should be doing on an ongoing basis. There are many ways to tap into what your customers think; exit surveys on your website, opinion polls on your social media channels, questionnaires sent out with your order confirmation emails or focus groups with loyal customers. Each of these can be executed for free in most cases and will garner you valuable insight about the people who buy your products.
Invest in research and development
Research and development – whether that’s market research or development of new service or products – is crucial if you want to stay ahead of your competition. To encourage business innovation, the UK government has introduced incentives for companies that invest in research and development. Your expenses that are associated with this activity are weighted heavier than other expenses when your taxable profit is calculated. For each £100 of qualifying costs, your company could have its Corporation Tax profits reduced by an additional £125 on top of the £100 spent.