Safety first for a growing business

 

Your company is running smoothly. Cash is coming in and the customers are happy. But many entrepreneurs are not content to rest on their laurels. If you are aiming for serious growth or your market has become too competitive, diversifying or expanding into fresh markets might be the answer.

Sue Davenport

Steve Jennings, director of business banking for Alliance & Leicester Commercial Bank, believes that business owners set on developing a new product or service alongside their current operation should ask themselves what is motivating them.

'Think what the drivers are, then decide what you are going to do,' he says. 'Is it complementary to your existing business? Whatever you choose, you must do your research.'

Jennings warns that many experienced business owners assume they have nothing left to learn. 'Understand what effect the new things you are doing will have on the core business, otherwise you could put that at risk,' he says.

Another route to expansion is to enter new markets, with some of the greatest opportunities being overseas.

Sue Davenport, 46, from Newport, Gwent, is managing director of Pasta King, a company based in Newton Abbot, Devon, that provides part-cooked pasta and sauces to the catering industry. The business, which employs 68 and turns over £9m, is in talks with US railway company Amtrak to provide it with a microwaveable pasta product that can be prepared on a train in seconds.

Sue says: 'We were asked for this product-for two years before we pursued the idea. We got the interest from America at a trade show in Cologne. There's definitely an international appeal to our product and concept, but we're aware that we must not lose sight of our existing customer base.'

John Dunmore, managing director of the British Chambers of Commerce, agrees that a degree of caution and in-depth research are key when looking at expansion, especially overseas. 'Think about how you get your product or service into the new market,' he says. 'UK businesses still seem to shy away from e-commerce, but that is the easiest way to sell abroad.

'Otherwise, look for a distributor, overseas sales agent or joint venture. But always visit the territory and take advice. The Government body UK Trade & Investment will offer free help.'

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