By Mick Clark, Managing Director, WePack Ltd
Statistics show approximately 65 percent of new companies fail during their first 10 years.
In the cut-throat world of business, companies need to keep expanding to survive. With 65 percent of new businesses failing in the first 10 years across most industries, having a clear vision of growth is important from the outset.
However, scaling your business before it is truly ready is a sure way of drying up resources, both financial and physical, creating unsustainable growth that could be potentially business-ending.
Despite the difficulties brought about by the pandemic, WePack still enjoyed a 26 percent growth in 2020 thanks to its careful approach to expansion.
To ensure other companies also enjoy a smooth and successful approach, I’ve compiled my top questions businesses must ask themselves before beginning their growth journey.
#1 What areas do you want to grow?
When looking to expand your business, it can be easy to be over-ambitious and be too broad in your vision for strategic growth. But channeling your focus on the exact areas you want to see positive development can help you better results.
There are many ways you may want to grow your business, from the addition of new products or services, to seeing marked growth in revenue.
This targeted growth area will differ between organisations and it can be tricky to figure out which should take priority for the betterment of your business. For example, you may want to initially focus on customer acquisition before beginning to consider increasing your workforce or expanding into different locations.
It may be that your growth plan incorporates more than one initiative but tackling these in the wrong order and without a firm strategy in place could be detrimental to growth. So, it’s important you keep your overall goals for the company in mind and always have a solid plan you can rely on.
#2 Should increasing headcount be a priority?
Hiring is often considered one of the most challenging aspects of business management and finding the right people for your team can make or break a business. You should consider your employees your biggest asset, so it’s vital you have a strong hiring strategy when recruiting for your business expansion.
Keep in mind your vision of future growth and your long-term goals for your brand and don’t be afraid of changes to structures if they benefit the business. Restructures can sometimes be disruptive, but if you’re in the process of expanding, a reshuffle can be just what you need to promote growth.
WePack recently hired several production leads to oversee each of the business’ packaging silos – bagging, food, re-working of products and liquid filling – instead of having one person in charge of all areas. This helps drive a smoother process overall.
But before you consider a restructure or even begin hiring, you should set realistic targets that align with your recruitment needs – being overly optimistic or hiring at a pace that’s too fast for your growth will only result in redundancies and low company morale. Instead, set priorities for which jobs need to be filled quickly and be considerate of recruitment costs.
And remember not to neglect your current employees. Staff will need adequate training to adjust to new processes and deal with demands effectively. Embrace digital communication, particularly if part of your workforce is working remotely, and encourage e-learning where possible.
#3 Have you conducted industry research?
The saying ‘you shouldn’t compare yourself to others’ doesn’t apply in business; knowing where you stand in your field is crucial to getting ahead and improving your business model.
Conducting market research can not only help you identify new customers, get to grips with your competitors and assess brand awareness, it can also identify whether your desired expansion is both necessary and feasible.
Going global is often seen as the most impressive marker of growth, but even expanding your current premises can have a significant impact on your capacity for development. WePack recently increased its production floor area by 40 percent by adding a mezzanine floor to its premises to increase production capacity.
Whether you’re looking to expand your business overseas or at home, you’ll first want to make certain the market can accommodate your business before taking the plunge.
Consider first whether the market is already saturated with other competitors in your desired new location or whether there is enough demand to justify the costs of ramping up production.
To get this information, you should dig into existing industry research, or you can create your own by conducting surveys and focus groups with current and potential customers.
#4 How do you spot new opportunities?
Businesses need to keep evolving to stay relevant and be successful. One such way you can do this is by keeping an eye out for new opportunities for expanding your product line and the services you already offer.
Listening to your customers is not only important for gaining trust, but it can also help you obtain insight into your customers’ wants. Take advantage of surveys and reviews to assess any gaps you may be able to fill with additional products or services.
Social media is also a handy free tool that businesses can use to listen to their customers, watch competitors, and keep on top of industry trends as they happen to meet the needs of their key demographic.
For example, sustainability in packaging is quickly becoming an expectation among consumers, with 85 percent wanting the government to hold retailers responsible for reducing plastic packaging.
Companies can capitalise on this trend by offering customers more sustainable solutions, benefiting the environment while boosting the brand’s eco-credentials.
