Diversify your business in 2010

GB backs free seminars to help you drive your business into exciting new areas

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How business expert René Carayol and Barclays’ Business MD Steve Cooper can help you drive your business into exciting new areas.

Caution might still be the watchword for many small businesses in 2010, but plenty of entrepreneurs are starting to feel more bullish too; a recent survey found that 60% of small business owners are optimistic about opportunities for their firms over the next quarter, compared to less than 50% when the same poll was last conducted six months ago. For those who are looking to get a new business idea off the ground or diversifying into new areas, it’s worth taking some expert advice to avoid embarking on an expensive misadventure. That’s why Growing Business is helping Barclays to launch a series of seminars that will help you do exactly that.

Touring the UK from April, the Barclays Business Springboard Seminars offer free, impartial advice on everything from business planning to finance, sales and marketing. They also provide an opportunity to network and share experiences with local entrepreneurs and to hear from business experts including René Carayol, who has held senior positions at Pepsi and IPC, and Steve Cooper, managing director of Barclays Local Business. In preparation for the events, we asked Carayol and Cooper to give us their tips on building a challenger brand, business planning and diversification.

I want to diversify my business but am concerned that I'll damage my core proposition and overstretch my limited resources. What tips have you got for managing this process?

Steve Cooper (SC): “Be careful. Don’t damage your core business and the values you stand for. What can you do to make yourself relevant to the market you’re going into in a commercially viable way? The world changes every day, what works for someone today may not work well for you tomorrow.”

René Carayol (RC): “If you diversify to become a ‘me too’ business, be careful. As we head for the recovery, you don’t want to lose whatever makes you special and different.”

What tips have you got for small business owners who are trying to win market share from larger, more established rivals?

RC: “When I was at Pepsi, we woke up every single morning facing the most recognised brand on the planet. There was only one way we could hope to beat it and that was through the culture of our people. We had to be faster, more agile and more risk embracing. We called ourselves the largest small business in the world. Commands at Coca-Cola all came from the centre, ours were made from the frontline. The lesson for challenger brands is trust your people. Don’t give them tasks to perform, give them decisions to make.”

What are the most common business planning mistakes you've seen from clients that Business Springboard delegates should be making sure they're avoiding?

SC: “Poor presentation and a lack of realism. People blame the bank. Saying, ‘the bank doesn’t understand my business’ is the same as saying, ‘the client doesn’t understand my business’. It’s up to the business owner to make them understand. Be thorough and realistic. If you have a business plan or proposal, talk it through with people, including other entrepreneurs. Are you making yourself clear? What would you be looking for if I was pitching to you? Understand what you want to say and how you want to say it. It should be honest and direct. People get unhappy if there isn’t full disclosure.

As small businesses grow their customer base, what tips have you got that might help them maintain the personal service levels that helped them win business from competitors in the first place?

RC: “As you grow, don’t forget what gave you growth in the first place; you were small, intimate and you were in touch with your customers. Big companies don’t touch their customers. Richard Branson believes the bigger you get, the more agility, intimacy and customer centricity you lose. Virgin is a £24bn business, but he’s got something like 30 subsidiary companies. Whenever one of his companies looks like it’s getting too big, he cuts it in half, with two MDs. That’s a great model for a small business.”

For businesses hoping to expand and take advantage of any economic upturn, what tips can you give businesses to help them manage their cashflow as they grow?

SC: “People say, ‘sell sell sell’, I say, ‘sell, get the cash, sell, get the cash’. A sale is not worth having if you’re not going to get paid. So many small businesses that trade with other companies don’t have in writing what the terms of trade are going to be before the transaction is done. Have you done a credit reference check? What’s their reputation, do they pay on time, do they query invoices? There are many things that can slow payment down. Don’t find the sales, find the cash.”

The Barclays Business Springboard Seminars are running in the following regions: