New products or new markets? A scientific approach to growing your business.

ScientificIf you want to grow your business, there are really only four basic ways of doing it. When you see what your options are, you can decide which one might be right for your wet leisure business.

Nothing ever stays the same.

A business is always changing, that is the nature of business.

Those changes might be happening so slowly that it looks as if things are staying the same, or you might be so focussed on the day-to-day running of your business that you aren’t aware of them. But change is happening.

The market and that economy that your business operates in is constantly changing. The customers that you deal with, the staff that you employ, the skills that are in your business and the products that it sells. These change all the time.

If you accept that things are constantly changing then you have to decide whether to try and direct and manage that change or whether you are just going to ‘go with the flow’?

It’s always good to have a plan.

Most wet leisure businesses are fairly small. The ‘boss’ – the owner or manager – tends to be working just as hard at the daily work of building and servicing pools, installing spas or saunas, as any other member of staff.

They don’t get a lot of time to plan for the future, to work out a strategy for growth and added profit.

In fact, it’s easy to get caught up in all the detail and simply hope for a little more of what they already have, rather than look for what they really want or, perhaps more importantly, what they are really capable of.

Essentially, in order to grow a business, you have a number of pretty basic options that centre around the products and services that you sell and the people that you sell them to. There are four different combinations of markets and products and they are:

More of the same products to more of the same people.

Trying to sell more of your existing products to more of the same sort of people is called ‘market penetration’ and it’s probably the most common strategy for growth.

It works well when you are a young or new business trying to get established.

You try and become better known in your local area and get a better reputation for selling whatever wet leisure products you have chosen to supply.

Growth might be quite rapid at first because you are new and people haven’t heard of you but obviously, at some point that growth will tail off.

More of the same products to new customers in new areas.

In order to keep growing you might expend the geographic area that you work in by opening another showroom in another town or by going on to the web and trying to sell products further afield.

In some instances, opening another showroom can be quite a good tactic if you can spot an area where there is little or no competition.

You can use all the skills and knowledge built up in the core business to make sure you ‘hit the ground running’ and get the new operation off to a flying start.

Of course, there are increasingly few parts of the country that aren’t already covered by a wet leisure business and moving in to try and compete with an established local firm may well be tricky unless you have something special to offer.

Opening a web shop can be as costly and difficult as opening a new showroom and, of course, there is already a lot of competition on the web.

New products to more of the same people.

If your business has a well-established reputation and an existing customer base, this can be a good strategy.

It may be that there is one of the three major wet leisure sectors that you don’t work in – pools, spas or saunas – so adding that to your business offering may well bring in additional turnover and profit.

It could be that there are new ways to help your existing customers, such as maintenance and service contracts, and they would help grow your business.

Even if you do work in all three wet leisure areas already and you have an established service side to your business, there are always innovative new products coming out and making sure that you stay up to date with the latest developments in heating, automation, filtration and so on can give you a route to growth.

New products to new customers.

This is the most risky of the four growth strategies. You are sailing into unchartered waters.

However, it could be that you can use your skills in, for instance, water treatment or sustainable heating solutions, outside of the wet leisure industry.

It probably isn’t a strategy to follow unless a specific opportunity presents itself. Even then it would be wise to think long and hard before adopting this approach to growth.

A scientific approach?

These four strategies form what is called the ‘Anshoff matrix’; four little boxes that show you a basic approach to growing any business.

Igor Anshoff was an American mathematician and business guru.

So yes, it’s scientific. But at the end of the day, business is about people and if you want to grow your business, it is you and the people you work with who will have to do it.

But hopefully, this will give you a few ideas about the direction to go in.