The Existing Loyal Customer Base Business Essay

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The size of the small business is directly proportional to the number of customers we have, and the number of goods or services we can provide. Essentially, the only ways to grow the business are to get more customers, get the customers to buy more, or get the customers to buy more frequently.

However, the business must have the capacity to supply those additional customers, or have the customers to buy the extra goods or services we can source or provide.

Growing the business will require planning and preparation. Before expanding through a growth plan, Expansion will involve additional risk and will add pressure on the existing business. Plan carefully to ensure that we don't grow into new markets to the detriment of the existing loyal customer base.

the growth strategy may include any activity along a continuum including:

relocating your home based business to a business incubator;

exploring new markets interstate;

exporting to international markets;

innovation to develop products to satisfy the needs of a new market segment; and

franchising your business in order to open new retail outlet.

By implementing a carefully planned strategy that will increase the customers while maintaining supply, it may be possible to grow the size of the small business. the business will not only survive, but thrive!

Innovation

In its broadest sense innovation is the development and application of ideas that improve the way we do things and what we achieve. Innovation can produce changes in many areas such as the environment, society, technology, education and community health

Innovation is fundamental to growing and improving the business. It's about making changes that will improve the efficiency, profitability and ultimately, the viability of the business.

All aspects of the business can benefit from innovation whether it is finance, human resources, research and development, sales and marketing or logistics. The innovation does not have to be totally new or revolutionary; it may be a small but incremental improvement that results in a positive outcome.

we can promote innovation in our business by:

developing a creative culture that encourages and rewards employees for their innovative contributions;

investing time and money on innovation to create resources (financial and human) to devote to the process of innovation;

seeking customer feedback on how we are performing; and

using the networks to generate new ideas, learn from others and access new business.

Being innovative is about taking calculated risks which will require you to be positive, imaginative, fearless and undeterred by negativity, cynicism and resistance to change.

Main types of innovation

Broadly speaking, innovation in business can fall into three broad categories.

Product innovation

Developing and introducing new products, services or technologies. researching, developing and commercialising a new product to capitalise on an identified market need

Product improvement innovation

Implementing improvements to current products or services.

Process innovation

Streamlining and improving business processes to increase efficiency, productivity and profitability..

Franchising

Franchising is the practice of using another firm's successful business model. A business owner (a franchisor) assigns independently owned outlets (a franchisee) the right to market and distribute their products or services.

For a fee, the franchisor grants the right to operate a replicated business under a trademarked name, using established management techniques, marketing and operational procedures.

In addition to this upfront capital fee, the franchisee is normally required to pay ongoing royalty fees or a percentage of gross monthly sales and agrees to comply with franchising procedures.

If we are considering franchising as a form of expanding an existing business, we will need assistance from a team of professionals, including our accountant, solicitor, banker and franchise consultant. 

The successful franchising of any business requires careful planning.  The cost and time involved in the process of franchising depends on the complexity of the business, the proposed system and the current position. 

Types of franchise models

There are three major types of franchise models:

Business format franchise

This is the model that people most commonly think of as a franchise. As the franchisee we would be given the rights to use the franchisor's intellectual property in our own business

Product franchise

This is where the franchisee sells the franchisor's product from a wholesale or retail outlet. As the franchisee we would be given exclusive rights to sell the product within a specific area.

Processing or manufacturing franchise

In this model the franchisee produces the product. The franchisor provides an essential ingredient or "know-how" to the franchisee.

Exporting

Exporting is a great way to expand the business and if done properly, can significantly increase the profitability.

Getting the right balance between international and domestic trade can protect our business if there is a downturn in one of our markets.

Exporting will also expose us to new ideas, marketing techniques and ways of competing that we wouldn't generally experience at a local or national level.

The challenges and victories our experience through exporting to overseas markets will help develop our skills and ability to compete more robustly in our domestic market.

Success in exporting doesn't happen over night or by accident - it needs careful preparation, planning and commitment.

Getting the export business off the ground can be challenging and tricky so don't hesitate to ask for help.

What are the benefits and risks involved?

Benefits of taking your business overseas

Expands our business and spreads our risks;

Reduces dependence on the local market;

Uses excess production capacity;

Buffers against seasonal demand; and

Broadens our skill base, management practices, marketing techniques, and ways of competing.

Risks of taking your business overseas

Political risk - instability may result in default or blockage of payment or confiscation of property.

Legal risk - their legislation will affect all aspects of your business transactions.

Financing risk 

Credit risk - whether the buyer will be able to pay.

Transfer risk - any economic, political or government restrictions.

Exchange risk - fluctuations in exchange rates.

Transport risk - damage, loss and theft.

Regulations and quarantine requirements - will vary between countries

Export strategy

our strategy should identify the export aims and the resources we need to achieve them. we should:

analyse the business, the export environment, our product and service offerings and potential markets; and

develop plans to implement our strategies and ways to evaluate their success.

It is essential to develop an export strategy before launching into an overseas market.

there are numerous factors we will need to consider before you export your product. Some of these factors include time, money, knowledge, experience, capacity, employment, training, competition, price, quality and uniqueness.

Importing

Importing can be an excellent strategy for expanding the business. It can help reach new domestic markets, offer new products and reduce manufacturing and component costs. However a good import business doesn't happen without planning and research.

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