The latest recession has been tough on many UK businesses, with some finding themselves in a state of survival since 2007, however the stabilisation of the economy over the last few years has meant that companies are once again able to deliver growth.
A recent UK business growth report by Avondale depicted that business owners are starting to think more optimistically on the general business landscape, with 67% of businesses claiming their companies are in growth mode.
Positive growth patterns
To maintain this increase it’s vital to spot the areas for investment that deliver positive growth patterns. The report strongly suggested that most businesses still favour marketing techniques and releasing new products as their preferred method to drive profit. It also revealed that 62% of business leaders believe that increasing marketing will help a business to grow faster.
We are beginning to see more companies making internal investments, using methods such as increased staff training and middle management employment to drive long term growth.
With the clear results these methods have demonstrated, the real question business owners should be asking is should budget be spent to drive immediate financial results, such as new products or marketing, or should it be invested in longer term staff training and retention?
>See also: Developing a culture to start and grow
For smaller companies, marketing and new product development plays a significant part in their growth, with 75% looking at one these routes as a strategy for growth and over 63% reporting that they have launched a new product in the past year. These figures indicate that companies favour these methods as they provide an organic route to growth best suited for businesses without huge cash reserves.
62% of respondents surveyed state that they believe marketing is instrumental to their growth and believe increasing marketing will help a business grow faster, whilst 48% say they also utilise new products to achieve this.
During an exclusive roundtable to discuss the report, Matt Owen, MD of digital marketing agency Jellyfish, noted that marketing is often a more popular investment for business owners than longer term options. He said, “Marketing offers faster more tangible results which are far more appealing for businesses owners over things such as investing in the training of staff.”
It is widely recognised that internal team training leads to long term professional development. Enrolling staff in formal training and development programs can lead to several benefits, which can help companies to form a strong network of qualified replacements for senior members of staff if needed. This constant high quality of staff results in a consistent workforce at all times which can in turn lead to steadier prolonged growth.
There are of course risks associated with applying finance to training. For example, if you’re a relatively young business and have a high turnover of staff, it can seem like a waste to spend time and money paying for the training of a staff member who may be with the company for less than two years.
Another example of long term investment is the recruitment of middle tier management. Whilst some companies see middle management as an unnecessary expense, the experience this level brings can make a huge amount of difference to a business. Leaders are the catalyst for achieving success.
They will seek out more challenging assignments, always meet deadlines and line staff will respect their direction. A team that is led by a good motivator and an inspiring innovator will ultimately achieve.
The report highlights the fact that 68% of business owners said that they spend most of their time managing their business rather than working on the overall strategy. In order for them to free up their time to focus on the growth strategy of their businesses middle management is imperative.
Looking at the evidence it’s clear that business leaders are favouring marketing and new products for quick financial gain. However, as the report proves, it is a challenge for these businesses to retain middle management.
Could this suggest these companies are focusing their efforts in the wrong place by putting too much emphasis on immediate growth strategies when training quality management could have longer term gains? With the current economic stability, perhaps smaller companies should look to mirror companies that bravely go against the trend and invest in quality middle management.
Further reading on business growth: Growing your business using the lean start-up model