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How to grow your business

How to go about growing an existing business.

Starting out on your own is an exciting time - whether it's picking the name of your new company, sourcing office or factory space or hiring your first staff, you're constantly assaulted with fresh challenges. This all helps to keep you motivated and life can seem good.

However, if you ask most successful engineers what's the hardest thing they had to do when setting up by themselves, many would respond that it's actually growing a business. This is because for many companies, success either happens quickly or failure becomes an inevitable outcome. However, for another significant number of new start-ups, some will survive the first one to two years with average success, and be content with that; but almost inevitably there will come a point when new businesses will have to register growth in the company, either to fulfil their own wishes or simply to answer investors or the bank.

So how do you go about growing an existing business? Well, some of the lessons already expounded on how to set-up and start a new business are equally relevant when it comes to growing a business.

Something which is often over-looked is the importance of retaining contact with the founding partners/employers/investors. These are the people who first started the business and, particularly with chemical or wider engineering start-ups, are the gate-keepers to a lot of knowledge. Hence, if you can, keep in touch and use these founts of wisdom - as you might find a quick update meeting with the original owner is worth its weight in gold.

Only try and grow a business which has existing customers who interest you. If you're coming in from outside to try and help grow a business and the people to whom you're selling bore you, it's going to make things difficult! Typically for engineering companies, your chances of successful growth are that much higher if you have a natural understanding with the technology and customers of the business, be it shampoo polymers or performance equipment for sailors.

Something which is often fundamental to engineering start-ups more than most other sectors, is that the founding idea or invention doesn't have to be world shattering. The likes of Sir Frank Whittle or James Dyson don't come around that often, but that doesn't mean that there aren't lots of other smaller opportunities out there. Often looking at an existing idea and then basing your business on a small incremental step forward can be just as successful. Using the skin care polymer example above, you don't have to invent a whole new product, but rather just a new method for dispersal of the polymers, which could then open up brand new revenue streams.

This opening up of new income paths is critical for growing an existing business. The new flows can come from existing products and can represent a very small change, but they are vital as they open up new opportunities and widen the income flows. They are also less expensive to implement, they utilise existing support infrastructure, be it sales or marketing etc., and there is no 'new concept' sale required to customers as they are used to most of the existing technology or USPs.

An area where many existing businesses fall down is understanding financial planning and management accounting. Even some multi-national companies have a poor understanding in this area and many SMEs don't even grasp the fundamental areas of cash flow and profit and loss! Just because there is money flowing through the accounts does NOT mean that all is well - a sensible understanding of this area is vital.

To that end, many engineers who have started up businesses and are now looking to grow them find that they lack knowledge in particular areas, often marketing, financial planning and business strategy, but this can be easily rectified. One of the best ways is to invest in studying for an MBA. Once qualified, earning potential is often doubled or tripled within a few years and it gives the holder a range of contacts and self-confidence which would take many years of running your own business to accumulate.

Engineers are well served in this area, as there is a dedicated source designed to help promote engineers in UK boardrooms and to grow their businesses. Administered by the Royal Academy of Engineering, the Sainsbury's Management Fellows exists to fund engineers' study for an MBA at a top business school.  Lastly, if growing your business is your primary goal, there is only one real way to do this, and that's by increasing your income more than your expenses. This inevitably boils down to selling more of whatever your product or service is, and the crucial point here involves the word 'sell'.

To grow your business it's highly likely you will have to increase sales and that's only going to happen if you have a well-organised sales process. Many engineering SMEs rely on the owner or inventor as primary sales person, whereas often they can make quite poor professional salespeople as they are too close to the business and, quite rightly, protective about it.

It is far better to invest in employing a really strong salesperson who has the skills to increase the income streams by setting up robust sales processes to ensure that this revenue comes in. Without it bills are likely to go unpaid and before long it's a slippery slope to whether the business will survive or not.


Mark Spence is an engineer turned entrepreneur who owns and grows three SMEs, including Mass Measuring Systems and Cosmetic Rheologies, both based in Manchester. He studied for an MBA through the SMF and is now working on other acquisitions to add to his existing companies.