Back to basics
”A business has to be involving, it has to be fun and it has to exercise your creative instinct” – Richard Branson
Nedbank hosted a power breakfast and network opportunity where our franchising specialist Eric Parker provided insight into growing your business by going back to the basics.
When looking at customers one soon realises that they are surrounded by negativity which automatically results in the tendency to hold back or to be reluctant. This can be caused by various factors in their everyday lives; the most prevalent factors being unemployment and job insecurity.
Due to these circumstances people are currently looking for three things from a business;
- and value.
These characteristics have to be intact for a business to survive.
It is important to note that strong businesses will survive as they continuously look for opportunities to acquire, grow and prosper.
Optimise your business
Every business should determine how optimum they are before thinking about business growth. Businesses have become so blind to the actual facts and therefore they have to critically review and evaluate various factors such as;
- product or services
- customer service
- pricing or price strategy
- brand positioning
- packaging or merchandising
A business should be analysed to determine various gaps and the opportunities that could potentially close the gaps ultimately resulting in a successful growing business.
In our experience businesses don’t remain static. Adapt or die has become prevalent in the business environment; changes should continuously be made to keep in touch with the market trends. Businesses that are not making any progress are actually moving backwards and declining. Businesses need to have action plans in place to grow and prosper.
This can be done by;
- Increasing customer counts
- Increasing transaction average
If you have customers you can always find ways to trade them up and getting them to buy more. It is very important for businesses to maintain customers. Even though customer acquisition is very important, businesses should never neglect or ignore their existing customers.
Financial health check
Every business should be doing this on a continuous basis; thus including the review of basic financial information and ratios. The results will allow businesses to act promptly by closing the gaps and maximising the results.
These financial checks should include:
- Income, Gross Profit and Costs
- Stock analysis: stock turn ratio
- Stock counting
- Profitability of each customer
- Year on year growth
In tough economic times, businesses cut down on one of the most crucial areas for business growth; namely marketing. Marketing is seen as one of the best investments for a business, if it is implemented correctly. Good marketing tactics will result in increased awareness but only if the business has a clear positioning strategy and is dominating a certain form of media. The current economic state requires marketing to be below the line or more promotional in nature. The current marketing ratios for tough economic times are 60% on promotional attraction and 40% on brand building. Marketing on a tight budget can even be successful if the right gaps are identified and the opportunities approached optimally. It is very important to add value to the market as customers are looking for value offers.
Businesses have the opportunity to work with their suppliers and build good relationships that will eventually result in;
- volume discounts
- settlement discounts
- extended credit
- consignment stock and
- new suppliers
It is important to note that businesses should not become complacent; they should be looking for competitive quotes.
Modern sales tools
Businesses should be aware of these tools such as:
- internet sales,
- new distribution methods (for example distribution through postal services can be seen as problematic)
- loyalty cards,
- joint ventures with other companies such as joint promotions and
- updated and interactive websites that draw customers
Motivate and assure staff
Quality and service are derived from staff members therefore businesses have to:
- work with their staff
- provide training
- provide incentives
- be good communicators.
It is important for businesses to analyse their competitors:
- Make sure the offering is superior
- Future opportunities for acquisitions from other competitors’ if businesses are sharp and observing.
The power of franchising
Franchising is a great opportunity for businesses to grow with limited capital and risk. Currently South Africa is not utilising this tool effectively as there is much scope for the growth and promotion of franchising.
To conclude in this difficult economy businesses have to offer better service and value than competitors if they want to survive and grow.
If you would like to discuss this topic with us we would welcome a no obligation meeting,