By Lloyd Gilbert
Many successful businesses start with a great idea, an ambitious and enthusiastic founder and a responsive client base. Many times this is followed by impressive growth. Bus as night follows day the growth trajectory is inevitably followed by a plateauing effect or in some cases revenue decline.
- Increased competitive intensity – competitors introduce similar offering into the market.
- Market saturation and reduction of repeat purchases.
- Commoditization of the product or service offering – if your product is undifferentiated, competitive intensity can play out as a price war.
Businesses can consider several levers to get a business back on track for growth, healthy profits and sustained business investment.
Exploring new sectors
It is not uncommon for businesses to be single sector focused. More often than not these business do have the broad capability to service adjacent or distinctly different market sectors.
For example an engineering firms may service the transport sector such as rail and over time develop valuable intellectual property including skills and technical knowhow. But their capabilities make by relevant to the utilities or mining services sector.
Another example is the food sector. Many food manufactures focus on the retail sector, which may lead to lower margins. It may be worth considering other sectors such at food services or large service based industries such as the heath sector.
“A simple request from a potential client in a new sector may be the signal to investigate a growth play” Lloyd Gilbert
Steps to consider:
- Do you have the know how to alter your products or services to enter a new market?
- Source credible data sources to size the make and assess competitive intensity
- Will it deliver improved margins?
- Assess investment requirement
- Do you have the funds available or access to funding sources
- Build an investment case
- Consider a small pilot program to test your assumptions
Two important sectors – Export and Defence
Export and the Defence are potentially significant opportunities. A number of Western Sydney businesses are now successfully supplying to the Defense sector. Adapting your business to the Defence may require adjustment to your operating and model but is worth investigating.
The export market is one of the largest untapped opportunities for Western Sydney business. The participation rate is low, less than 5% for SME. Including export in your business strategy is worth investigating. You may choose to engage expert to assist developing your strategy. This should speed up the assessment process.
Other growth considerations
In addition to the above other levers may be worth investigating:
- Cross-selling – this is relevant for business that have multiple service or product lines
- Product development – this is primarily concerned with identify unmet need in the market develop new products and services to fill the gap
- Structured client satisfaction programs – this is particularly important for you larger clients. This will invariably shed light of service gaps leading to more opportunity
- Innovation – empowering your staff to be on the look out for process improvement opportunities, identifying client unmet needs or dissatisfaction is practical way to introduce business improvement
Lloyd Gilbert is a board member of the Cumberland Business Chamber and leads Business Development for KPMG Greater Western Sydney. Lloyd has an MBA from Macquarie Graduate School of Management and a Bachelor of Engineering from UTS. Feel free to email Lloyd at firstname.lastname@example.org or telephone: 0401 480 261