Developing your business

Once you’ve successfully established your business, you’ll want to aim for steady growth and development so that your ventures remain profitable. Expanding your business means constant planning, analysis and innovation. You will need to have a detailed overview of the current state of your business, and have reasonable expectations for the future. However, you must also continue to maintain and control the day-to-day operations of your business. Developing your business means you might:
reassess your goals and strategies;
find new customers;
increase sales figures;
increase productivity;
utilise emerging technology.

The following information will help you develop your business in the most efficient way.

— Advantages of being small
Although developing your business is important to ensure growing profits, expansion is a long-term financial commitment. Meanwhile, there are many advantages to being a small or medium-sized business – taking advantage of these by carefully planning and managing your business is the key to maximizing productivity and profitability.

Advantage in the labour market
During a time of cost-cutting, recession and outsourcing, many employees worry about their job security. Working for a smaller business means increased job security and therefore, increased employee loyalty. Working for a small or mid-sized organization also means more individual responsibility and challenge – roles are more varied and result in greater employee satisfaction. You can use this advantage in the labour market to attract better employees whilst retaining those that you already have.

Innovation
To stay ahead of your competitors, conform to market demands and utilise emerging technologies and market trends, it is important for to invest some time and money into innovation. However, large businesses often need to go through a complex hierarchal system (including shareholders and investors) before they can change direction or invest in new technology. Smaller businesses are much more flexible and unrestrained – they can focus on long-term profitability rather than short-term earnings, and are able to invest into profitable ventures of the future.

Closeness to your market
It is often thought that the larger your market share, the more profitable your business. But this is not always true: as you market share grows, the more remote you become from that market. Smaller businesses are closer to their market, which means that they can identify and respond to market changes sooner and more effectively than their larger counterparts.

— Strategic business planning
Strategic planning is key to successful business development. It is imperative to know what your future goals are, and what you realistically need to do to achieve these goals. In order to improve performance, prepare for any unexpected problems, grow the business and maximize profits, it is essential to formulate carefully-planned strategies based on extensive research and backed up by accurate data.

Successful strategic planning means you:
have a thorough understanding of the market, including your competition and important market trends, before formulating any strategy
base your goals on actual financial data and not just estimates
avoid goals that are too generalized and not specific enough to convert into actionable items
avoid goals that are too narrow and do not use a holistic approach to increasing overall profitability

Strategic business planning involves thinking out-of-the-box and coming up with fresh new ideas. It’s a good idea to think about the so-called ‘PEST’ factors: Political, Economic, Social and Technical. In other words: the competition; the strengths and weaknesses of your business; customer feedback; and the efficiency of the cost management system currently deployed.

Strategies need to be broken down into small implemental steps; deadlines and targets assigned to each stage of the process; responsibilities assigned to appropriate individuals; and an effective method of tracking the results and measuring performance set up.

— Brainstorming
Having regular brainstorming sessions with your colleagues, employees and management team can be a great way to identify strengths and weaknesses; problems and opportunities. Unfortunately, within many businesses these kinds of meetings are often inefficient and unproductive. Week after week we organize brainstorming sessions with our team members in conference rooms and cafeterias in order to come up with brilliant new ideas for developing the business. Managers dash in from another meeting, plan for the next one with senior management while they’re there, and dash off long before any flash of brilliance occurs. Employees simply view these as good breaks to get away from the grind of work and catch up on some day dreaming. In short, nothing useful comes out of them. So how do we make these sessions effective and get everyone involved in the planning process? Here’re some tips:
Stop talking AT your employees and start talking TO them. Get them involved by making them feel like they have a chance to make a huge contribution towards the company’s future. Incentives for the best ideas are often a good way to generate interest.
Spell out in clear and easy terms the goal behind the planning strategy. Don’t be vague and confuse the team by setting random targets. Better ideas will result when employees know what is the specific goal that needs to be met
Set concrete action items and assign specific responsibilities at the end of each meeting to ensure that there is productive output.
Set time deadlines and implement a way to track results and evaluate progress.

— The business plan
Chances are you would have created a business plan during the early stages of setting up your business. The development stage of your business is a great time to reassess your goals and objectives, and to identify areas of improvement or opportunity.

Business plans not only help in the assessment of financial situations, but also help give focus and direction to all business activities. They should not only be made when starting up a new business. It’s also a good idea to regularly draft and manage well-researched plans at various stages of the business cycle. Remember: your business plan should continually be revised to reflect your current financial situation and include realistic expectations for the future.

Before starting, it’s important to have all the information required to devise a business plan. This could include financial reports, past sales and marketing performance reports, market research and customer feedback surveys. It’s also a good idea to perform a ‘SWOT’ analysis of the business which spells out the Strengths, Weaknesses, Opportunities and Threats in relation to the company and the industry sector.

Reviewing the marketplace, carefully segmenting the target customers and understanding their specific needs, and keeping an eye on the competition are all important steps involved in drafting a good business plan.

Creating a successful business plan requires a lot of information, in-depth analysis and careful planning. Particularly during this important phase of your business, it might be worthwhile to enlist the help of a financial expert, such as an experienced accountant.

— Building a brand
Corporate branding is one of the most effective strategies to expand and develop your business. Your brand should be a reflection of you and your business, and should set you apart from your competitors. It should create a unique image of what you want your customers to think about your business. A successful brand inspires brand awareness and recognition, and encourages long-term customer loyalty.

Branding is not simply about creating an attention-grabbing logo or catchy slogan – it’s not just about packaging or advertising. Corporate branding is about establishing your unique identity in the marketplace, which sends out a positive, consistent message to your current and potential customers. Brands are often used to signify a particular quality or aspect of a business, such as excellent customer service, value for money or a cutting-edge approach.

If you are unsure about what kind of message and identity you want to create for your business, it might be a good idea to refer back to your business plan. It is important to ensure that your branding is in line with your set goals and objectives.

— Managing new staff
Growing your business often means taking on new staff. At this important phase of your business, you’ll want to make sure that the people you hire are right for the job. Making the right recruitment decisions can mean the difference between success or failure.
It is important to establish a structured process for recruitment. You might want to:
Identify what you are looking for
See if there are any existing employees who you can promote from within the business
Be objective and open-minded
Ask the right questions
Establish an effective induction procedure

There many legal and financial implications for taking on staff, including:
Equal opportunity regulations
Employment contract – terms and conditions
Minimum wage
Dismissal, termination and notice periods
Sick leave
Maternity/paternity leave
Employer’s liability insurance
Setting up a pay scheme
Superannuation contributions
Tax regulations

— Outsourcing
One of the strategies you might use when developing and growing your business it to outsource some of your non-core operations. Processes such as cleaning, customer service, payroll, marketing and IT are commonly outsourced to external organizations. Before you make the decision to outsource, consider all possible advantages and disadvantages for your business.
Advantages might include:
Allows you to focus on your core activities
Costs are easier to budget because they are fixed in contractual agreements
Cost-effective
Streamlined use of resources
Increased staffing flexibility
Increased quality of service through specialisation
Shared risks and rewards
Accommodates peaks and valleys in demand

Possible disadvantages include:
Loss of managerial control
Hidden expenditure, including legal costs
Threat to security and confidentiality
Decreased employee security and satisfaction
Quality problems
Tied to a contractual agreement

— Benchmarking

While you are developing your business, it is important to keep on eye on your market position. A great way to do this is through benchmarking, where you measure the performance of your business against that of your competitors. Effective benchmarking:
Establishes industry standards
Identifies strategies to achieve the best possible relationships with your customers and gain the best possible results on your bottom line
Observes how your competitors achieve these standards and utilise these strategies
Applies this knowledge to achieving and maintaining these results yourself

Benchmarking is about acknowledging your strengths and weaknesses, and identifying areas of opportunity and improvement – based on your competitors’ performance in the marketplace. It is imperative to always be aware of what your competitors are doing and how successful they are in doing so.
A good benchmarking review can help you in your business planning and cash flow management. Benefits of benchmarking include:
Increased customer understanding
Competitor awareness
Emphasis on innovation and improvement
Increased efficiency and productivity
Improved customer retention and customer satisfaction
Higher profits

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