How Entrepreneurial Brits Can Convert Good Ideas Into Hard Cash

Lord Young's recent 'Growing Your Business' report has revealed the UK business scene has growth issues. Three quarters of all UK firms are sole traders that haven't yet taken on their first employee.

The combination of economic turmoil and a challenging jobs market has spawned a generation of entrepreneurs who are inventing, innovating and furiously selling.

Not only do entrepreneurial Brits have the potential to create jobs, they are buoying the UK economy, too.

But Lord Young's recent 'Growing Your Business' report has revealed the UK business scene has growth issues. Three quarters of all UK firms are sole traders that haven't yet taken on their first employee.

There's only so far a good idea and a quality product will get a fledgling business. It's all very well having vision and a business plan, but how do those with no previous experience implement a strategy and make growth happen?

While many can prove their ideas are profit-making, many young businesses struggle to scale up, complaining of recruitment issues, or being unable to get past the psychological £1million turnover mark.

There are three main barriers to growth. Businesses that continually target the wrong markets with the wrong products are surprisingly commonplace. Knowing your audience is key, which is why targeting an unfamiliar demographic or location shouldn't be undertaken without extensive market research. This can be outsourced, and doesn't have to be expensive.

Look for markets that are rising naturally and devise or select a product that encourages repeat purchases rather than a once-in-a-lifetime buy -- the key is always steady, and steadily rising, cash flow. Think razorblades, or replacement toothbrush heads!

In the same vein, many businesses don't put enough effort into retaining customers and become far too intent on winning new business. This is actually more expensive and more time-consuming than focusing on retention. Contented, loyal customers are also more likely to recommend your product to others.

Recruitment is a major bugbear for young businesses. Attracting the brightest talent without having to pay extortionate recruiter fees can be difficult, particularly for micro-businesses that fall under the radar.

Adopting a trial and error strategy to recruitment is often necessary, though far from ideal, particularly if you're trying to create a good team dynamic. Hiring on a freelance basis before offering permanent contracts means businesses are less likely to burn bridges.

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