Business expansion may not be easy, but that’s not to say it’s impossible. So how are CEOs expanding their businesses?

Business expansion may not be easy, but that’s not to say it’s impossible. So how are CEOs expanding their businesses?

While many companies will have been grateful to just be able to tread water over the past year or so, there are businesses which have managed to achieve substantial growth. It’s been done through clever marketing, smart recruitment, staying abreast of the latest technology and, of course, some good old fashioned sweat and toil.


Recruit the right staff

The best smaller companies often know how to develop and nurture talent from within the business. 
Jorn Lyseggen is the founder and CEO of the media monitoring company, Meltwater. He says that his company’s recruitment process has been key to its rapid expansion: ‘The single most important question when recruiting staff is to see if they have management potential. The main bottleneck in a company’s growth is in the development of the management structure and good succession planning. It’s a combination of age and experience that we look for.’
 


Since it was formed in 2001, Meltwater has grown its staff from two to around 700, and currently has a turnover of just over $100 million (£63 million). The company also has 50 offices across 23 countries.
 

Far from being satisfied, Lyseggen aims to build six new business lines within the next five years, all of which he hopes will match the original company’s growth.



Stay on top of technology

In order to grow in an established field, a company has to gain an edge over the competition and move with the changing times. 

E-conomic is an accounting company that allows customers to access its services online without the need to download any software to their computer. Anders Bjornsbo, the company’s UK MD, sees its growth as linked to the growing popularity of the Cloud.

 He says: ‘We’re experiencing growth as part of a generic movement towards online accounting tools. Nothing is installed on your computer.’
 

Over the past year E-conomic increased its turnover from £4.7 million to £6.1 million and it is currently providing a white label service for several big accounting firms as the technology becomes more popular.


Join forces

As with every successful military campaign, forming an alliance is a quick way to increase your force and gain a competitive advantage over the opposition. The secure document destruction company, Shred Easy, was formed nine years ago when managing director Jim Watson joined his existing shredding business with a company called Shred Fast. 

A turning point for the business was the signing of a joint venture with the office products supplier Office2Office.

Watson explains that the deal allowed Shred Easy to sell its services through a company that already had a client base of blue-chip public sector organisations. 

Watson also credits a large part of Shred Easy’s growth on its sales focus, into which it re-invests a large portion of its profits. He adds: ‘We’re fairly tenacious in contacting our prospective customers both by direct methods such as the telephone and less direct approaches like email campaigns and exhibitions.’

Make use of social media
 


The unprecedented rise of social networking over the past ten years has not gone unnoticed in the business world, with companies clamouring for attention on sites like Twitter and Facebook.

 E-conomic has also developed a broad social media presence, which can raise a company’s profile and help to create a community among customers. 

Bjornsbo comments: ‘The online environment is important to us so we have produced instructional YouTube videos, Wikipedia pages, and user forums where clients can meet each other for help and advice. All of that drives the whole experience for the user and forms a community.’


Of course, another reason for social networking is to help drive traffic to your website. For online businesses, that’s absolutely essential as John Sollars, the MD of Stinkyink, explains: ‘The key for us has been organic growth using Google to help people find us. It’s been a really hard effort to drag ourselves up in the rankings.’ 


Sollars has maximised search engine optimisation, such as tagging key words and blogging in order to get traffic to his site. The company, which was founded in 2002, increased its sales by 70 per cent last year to £3 million and Sollars claims to be winning 2000 new customers a week.

Interestingly, he’s done this while shunning Google Adwords. ‘Because the cost of a sale remains the same, if you rely on Adwords then as your business increases your spend on Adwords increases.’ 



Bring on board new investment
 

Whether it’s from a private equity house or business angels, securing new investment for a company can help to boost it to the next level of competitiveness. In May 2009 the private charter airline SaxonAir was sold to a new investor who has since put $30 million (£19 million) into the company. The new chairman’s investment has allowed the company to purchase several new aircraft, including jets and two helicopters.

In 2009 the company’s turnover grew by 30 per cent to around £2 million. SaxonAir’s MD, James Palmer, says: ‘During the recession period the whole business jet sector got smaller and a number of companies went bust, which helps other companies to come through and grab that business. We’ve also started to look at the sales, acquisition and management contracts of other people’s jets, basically acting as a brokerage for them.’

Help customers save money



Every retailer knows that customers love getting what they believe is a bargain, but helping them to save money doesn’t necessarily mean that a company has to bear the cost.



Chris Davies is the CEO of the equipment hire company HSS. The company recently introduced an online system to enable customers to track how many items they have on hire and whether or not they need them all. Davies says this means customers ‘don’t pay for dead time’.
 


He adds: ‘We haven’t cut our prices; we’ve enabled our customers to pay a similar unit price but control other elements in order to reduce their total cost.’
 
For the first half of 2010 HSS had sales of £81.9 million, up 13 per cent on 2009. ‘The absolute number one thing we’ve done is to focus on customers, which sounds terribly simple – most businesses say they do it all the time but probably many don’t,’ adds Davies.
 


Diversify

SaxonAir recently signed a ten year contract to be service provider for all visiting VIP jets and general aviation aircraft at Norwich airport, which Palmer admits wasn’t in the original business plan.

 Norwich airport’s business customers had complained about generally poor service at the terminal, including having to share the same facilities as holidaymakers. In response, the airport operators allowed SaxonAir to take over VIP baggage handling at the airport.

‘Such was the success that we moved into becoming a general aviation handling agent here at the airport,’ says Palmer, adding that  
the company is currently building a business aviation centre at the airport for around £6 million to become the exclusive business aviation handler there.