“You may have a great product that’s innovative and appealing to consumers, but if it is not easily accessible, the prospects for growth can be bleak,” says Ravi Govender, Head of Small Enterprises at Standard Bank.
According to Govender, this is where most entrepreneurs make a mistake and lose the opportunity to keep their businesses on an upward growth trajectory.
He says many successful businesses that have promising growth prospects often find it challenging to break into new markets, because their owners lack the required expertise to take their businesses to the next level.
“The sustainable growth of a business means having access to more shelf space where your brand can attract consumers and gain access to new markets,” Govender says.
‘Don’t be afraid to enter new markets’
Govender says this could result in the entrepreneur becoming a victim of his/her own success, limiting opportunities for growth by overlooking the importance of capitalising on additional finance sources to open up new markets for the business.
“At this stage, the failure to sell some equity and take on partners, shareholders or additional debt to finance growth means stagnation for the business.
“Ultimately you create more opportunities for competitors who are happy to make sacrifices for future growth,” Govender says.
When a business is doing well and sales have reached a satisfactory level, the entrepreneur can then afford the luxury of taking time to review his/her growth strategy.
Here are the factors that should be considered when reviewing a growth strategy:
If you are not ready for this major step, Govender recommends hiring company representatives that can help you to achieve national sales and further gain access to larger chains for future growth.
“If you feel there is still enough room for major product sales within smaller outlets, use your company representatives to gain more access to these markets. Independent outlets will not only stock your products, but will also generally welcome any brochures and advertising material you may offer.”
‘Be prepared to meet demands’
“Once you have reviewed your growth strategy and have taken all factors into consideration, you will realise that your ambitions for accessing new markets will require a new source of finance,” says Govender. “It pays to explore these opportunities as they could provide the impetus to grow the business.
“After all, if you are exploring new markets you have to be prepared to meet anticipated demand by growing production and manufacturing lines.”
There is nothing worse or more destructive for a business, Govender says, than creating demand through new markets and then not having products available. He adds that once retailers lose faith in your supply chain, they will simply stop ordering products and move on to the next available supplier.
“If you do not meet your customers’ expectations, not even the best advertising, marketing and web campaigns will keep your business on track. Service is, and always will be, the criteria upon which you are most often judged.”